NY PostSchumer devises tax break to rescue failing Citi Bike
By Geoff Earle
April 4, 2014 | 10:59am
WASHINGTON – Sen. Schumer is riding to the rescue of struggling Citi Bike.
Schumer, a powerful Senate Finance Committee member and bike rider, tacked an amendment onto a pork-laden tax “extenders” bill that lets employers offer tax-shielded benefits for bike-sharing just as they do for subway and other commuter benefits.
The committee passed the amendment Thursday without opposition, and reported out the tax break bill with the bike share provision included.
It now heads to the Senate floor and the House, where it’s fate is uncertain.
Capped at $250 per year, the new break would let employees pay their bike share bill with pre-tax dollars — meaning that the government would be subsidizing their rides.
The current cost of an annual bike share membership is $95.
Alta Bicycle Share, which operates the program, has already indicated that annual fees will be going up.
The federal subsidy would soften the blow to riders.
Legislative action was required because the IRS has ruled that bake sharing doesn’t qualify for special tax treatment under transportation laws on the books. “A bike share program is not a mass transit facility,” the agency ruled in 2013, nixing one avenue for funding.
Despite its success, Citi Bike has run into steep financial troubles.
It has signed up about 100,000 riders, but still needs to raise millions to continue operations.
City Transportation Commissioner Polly Trottenberg said in March that the program faces “a number of financial and operational challenges.”
“Bike-share programs are a boon to commuters, the economy and clean air – and those who use them deserve the same benefits granted to those who drive cars and use mass transit to get to work,” Schumer said in a statement.
He said the bill would encourage companies to offer bike shares as perks, and will “enhance both the financial standing and the importance of these programs” – meaning it would help bail out Citi Bike.
Schumer aide Max Young indicated that the provision cleared the committee with ease. “No one’s going pick at this. It basically costs nothing because it’s so little money,” he said.
But House Republican leaders have shown little interest in taking up the tax extenders bill without broader tax reform, an effort that is already collapsing.
The “extenders” bill usually attracts support from both parties because other tax goodies benefit a litany of companies, while items like tax-free savings for college have popular support.