Gov. Brown Vetoes Commuter Benefits Act, Cites Cost Agument

Sounding like a spokesperson for the Republican opposition to the bill, Governor Jerry Brown announced a veto of SB 582, citing the cost to small businesses.  From his veto statement:

While I support the goal of reducing vehicle trips, this bill would impose a new mandate on small business at a time of economic uncertainty.

Governor Brown tosses up an airball. Photo: Office of the Governor via ##http://blogs.kqed.org/newsfix/files/2011/04/Brown-Basketball.jpg##KQED##

There’s only one problem with this statement.  SB 582 doesn’t require anything of small business without the action of local government bodies known as Municipal Planning Organizations or Air Quality Districts (MPO’s and AQD’s) and the mandate they could require would barely cost businesses anything.  A coalition of environmental, transportation reform and public health groups supported the legislation as well as some large employers including Facebook and Genetech.

“We’re disappointed that Governor Brown vetoed this bill, which would have saved money for California employers and employees, while improving our air quality,” writes Rebecca Saltzman, a Program Associate with the California League of Conservation Voters.

So what would SB 582 have actually done?  It would have given MPO’s and AQD’s the ability to require businesses with 20 full-time employees (or in some cases 50 depending the transit options and air quality of the area) to provide commuter benefits to employees who commute to and from work without their car.  Despite the Governor’s rhetoric, there was a near-cost-free options to meet this requirement.

  • Give employees the option to pay for their transit, vanpooling or bicycling expenses with pre-tax dollars, as currently allowed by federal law;
  • Offer employees a transit or vanpool subsidy up to $75 per month;
  • Provide employees with a free shuttle or vanpool operated by or for the employer.

The first option basically has employers deduct an amount up to $75 from employees pay checks and provide them with a separate check for that amount to cover commuting expenses.  This allows transit and bike commuters to have a tax-free, or tax reduced if their monthly transit ticket is more than $75. 

In a letter to supporters, Bay Area based reform group TransForm noted that, “Commuter benefits typically reduce taxes for employers, too, so this is a win for everyone.”   By reducing the taxable salary of employees, employers would reduce their taxes and could save more than the costs of administering a commuter benefits program.

The good news is that individual municipalities already have the power to require commuter benefits programs.  Both Los Angeles and San Francisco have their own requirements and program already in place.  The bad news is that providing these cost-free benefits has become an oddly partisan issue in Sacramento.

But it wasn’t always that way.  SB 582 was first introduced by Riverside County Republican State Senator Bill Emmerson who guided the bill through the Senate with largely bi-partisan support.  Then, after the bill easily cleared an Assembly Committee, opposition to the legislation was registered by the California Chamber of Commerce and California Taxpayers Association.  Their opposition caused Emmerson to drop his support of the legislation (all mentions of the bill have been scrubbed from his website).  Sponsorship was then transferred to Bay Area Democrat Leland Yee.

For more details on the partisanization of this bill, visit the League of Conservation Voter’s Blogsite.

But one setback doesn’t mean that supporters of SB 582 have given up the fight.  “CLCV and our partners will continue to work to pass legislation that incentivizes and improves access to alternative means of transportation, like AB 650. That bill would establish a task force that will examine the current state of public transit, identify what is needed to make the system meet projected demand, map out associated costs, and – most importantly – determine how to consistently fund public transport to serve our state’s needs,” writes Saltzman.

Streetsblog will have more coverage of AB 650 next week.

  • Anonymous

    If we want people to drive less, make it more expensive to drive: gas tax, congestion pricing, registration fees.  It’s that simple.  These convoluted “disincentive” programs are silly.

  • John Clary

    The problem is making it more expensive to drive is political suicide, where making alternatives cheaper is not even when hoops must be jumped through.

    My personal take is we need to stop subsidizing driving and make drivers really pay the costs associated with their dirty habit, with charges for road wear by weight, wrecks (including law enforcement and cleanup), health costs from vehicle pollution, as well as lost tax income from all those empty parking lots that aren’t retail or manufacturing buildings.

  • Anonymous

    This isn’t a “disincentive” program, though. It’s an incentive for non-drivers.

  • Anonymous

    California is the most business-unfriendly state in the nation.  People and businesses are leaving in droves. While the this bill would have had a minimal effect if enacted, vetoing it did afford the Governor an opportunity to appear pro-business, while not doing anything meaningful.

  • Anonymous

    s/minimal/positive

    Payroll tax reduction for employers. What’s amazing is that all these small businesses haven’t figured it out for themselves.

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