Benefits of commute trip reduction programs
Regional mobility is critical for a strong economy and an exceptional quality of life. Businesses prosper when employees, customers, freight, and support services travel with ease on our streets and highways. And people in our communities going about their daily lives benefit in countless ways when traffic flows smoothly.

Programs that reduce employee commute trips not only make our region a better place to live, but also make good business sense. Here are just a few of the benefits businesses see from their commute trip reduction programs:

• Reduced B&O and payroll taxes
• Strengthened employee recruitment and retention
• Reduced absenteeism, sick leave, and late arrivals
• Increased employee productivity
• Increased employee satisfaction
• Reduced need for employee parking and office space
• Expanded geographic access to skilled workers
• Faster delivery of goods and services
• Public recognition as a good corporate citizen
• Continuity of business operations during emergencies

Washington State CTR Law
The Washington State Legislature passed the Commute Trip Reduction (CTR) Law in 1991 with the goals of reducing traffic congestion, air pollution, and petroleum consumption. The law was an effort to foster public/private partnerships that would encourage commuters to use alternative commute modes such as carpool, transit, bicycling or teleworking instead of driving alone to work every day. The CTR Law requires employers with 100 or more full-time employees who begin their work day between 6:00 a.m. and 9:00 a.m. two or more days a week to provide some type of employee transportation program to encourage the use of alternative commute modes.

The percentage of people who drive alone to work in Washington has decreased from 73.9 percent in 1990 to 73.3 percent in 2000. However, the decrease in the drive-alone rate at worksites affected by the CTR Law was even more significant. Among the 525 sites that have participated in the CTR Program since it began in 1993, the drive-alone rate has dropped from 69.7 percent in 1993 to 62.8 percent in 2003. (1)

During the state’s fiscal year 2002, employers contributed $36 million to encourage their employees to change their commute patterns. This is an investment of more than $13 for every dollar the State invested in CTR. (2) Employers continue to invest in employee transportation programs because it makes good business sense on so many levels.

Employer Tax Benefits
Employers and property managers can claim credits against B&O and public utility taxes when they provide financial incentives to their own or other employees for using ridesharing, public transportation, carsharing or non-motorized commuting. The amount of the credit is 50% of the amount paid, up to a maximum of $60 per employee per year. The state Legislature has provided for $2.25 million in credits each year, with an annual $200,000 cap per employer.

Allowing your employees to take pre-tax payroll deductions of up to $100 per month from their pay for transportation services can save both the company and the employee money on tax day. This pre-tax income can be used by the employee to cover bus, rail, ferry or vanpool fares. Pre-tax deductions are a win-win for everyone—employers pay less payroll tax and employees pay less income tax.

Another way companies can save is by offering tax-free transportation subsidies to employees. As with the payroll deduction, employers can offer employees a tax-free subsidy of up to $100 per month to be used for bus, rail, ferry or vanpool fares. Because the IRS considers transit subsidies a business expense, employers can deduct these expenses for tax purposes. And your employees get a great benefit that will save them money on their commute. For more information, check out King County Metro's document Tax Laws and Commute-related Expenses: Identifying the Tax Advantages.

Award-winning Employee Transportation Programs
Check out the list of local employers recognized for offering outstanding commute programs to their employees. Find out how to be a winner and get ideas for your worksite.

(1) Washington State Commute Trip Reduction Task Force, CTR Task Force 2003 Report to the Washington State Legislature, Olympia, WA, 2004, p. 4
(2) Ibid., p. 4.

Photo Courtesy of King County Metro Transit