Governor announces new
commuter program for state employees

The initiative will afford substantial savings to both participants and the State by offering a tax break to individuals who use public-transportation or vanpool services while commuting to work, as well as those who pay fees at a parking facility near their mass-transit center or job location.

"Drivers in New Jersey lose 261 million hours a year to congestion--an average of 45 hours per driver," said McGreevey. "This is time that should have been spent with our families, not stuck in traffic. That's why public transportation programs like TransitChek are so important. More people on trains will mean fewer cars on the road, and that results in commuters getting home faster. Whether we're fixing the DMV, installing Express E-ZPass or providing better mass transit, we are improving the quality of life for New Jersey's commuters."

Through the TransitChek program, 107,000 full-time State employees will be eligible to pay for qualified transportation and parking expenses using pre-tax dollars by purchasing vouchers or taking advantage of other salary-reduction arrangements offered by TransitCenter, Inc. Those who elect to participate will avoid federal tax liability on the portion of their income that is dedicated to commuting expenses. The State will similarly benefit from lower payroll-tax obligations.

"This program will provide an incentive for State employees to use mass transit in commuting to and from their jobs," said State Treasurer John McCormac. "The result, we anticipate, will be fewer cars on the road and a net benefit to participants, the State, and the environment. The initiative also dovetails with Governor McGreevey's efforts to encourage smart growth and development near existing transportation centers. The TransitChek program is available to all employers, so, hopefully, others will follow the State's lead and extend this benefit to their staff."

"As New Jersey's largest transportation provider, we are pleased that State employees now have a program that provides an incentive to use public transportation," said George D. Warrington, Executive Director of NJ TRANSIT. "State employees who use TransitChek along with our new Quik Tik program which lets customers pay for monthly tickets on line at njtransit.com, is a sure way for them to save both money and time."

"TransitChek is a remarkable program," said Jon Orcutt, director of the Tri-State Transportation Campaign, a mass-transit advocacy group. "Commuters save money; employers save on payroll taxes; and New Jersey Transit gains additional riders. Hearty congratulations are due to Governor McGreevey and Treasurer McCormac for setting such a smart example for workplaces across the State."

TransitChek will be administered in accordance with Section 132(f) of the Internal Revenue Code, which allows employees to make salary-reduction elections of up to $100 per month for transportation costs and $190 per month for parking expenses. Based on these election limits, an employee who uses mass-transit services can save between $272 and $392 per year in federal taxes through program participation. For employees who pay parking fees, the annual savings could be as high as $744.

The benefit realized by the State will be dependant upon the number of employees who elect to enroll in the program. The charts below detail estimated savings based on varying levels of participation. In most cases, the State's savings will be 7.65 percent of employee elections, less administrative costs.

Public Transportation:
Participants Annual Tax Savings for NJ
500 $45,900
1000 $91,800
2000 $183,600
3000 $275,400
4000 $367,200
5000 $459,000

Parking:
Participants Annual Tax Savings for NJ
500 $87,210
1000 $174,420
2000 $348,840
3000 $523,260
4000 $697,680
5000 $872,100

Assumptions: Employees elect the maximum monthly election. Employees participate for the entire year. Employee salaries are under the social security wage limit.

Detailed information regarding how to register for the TransitChek program will be provided to all eligible State employees prior to implementation.

TransitCenter, Inc. provides similar services to major public entities, such as the City of New York, and is the nation's largest administrator of transportation tax benefits, managing over 14,000 accounts with more than a half a million employees.