All posts by J. Logic

Bicyclists get scraps – government offers tenuous reimbursement

I was excited to hear that, bundled up with the $700 billion federal bailout bill, there was a tiny provision to give bicyclists a $20 per month commuter reimbursement that some bicycle advocates have been seeking for the last 7 years. While there are tons of incentives, subsidies, and tax deductions for automobile drivers, this is the first federal law that financially recognizes bicycles as a mode of transit. Is this crumb of a provision better than being ignored?

The way this works is that if my employer chooses to participate (entirely optional), I can have up to $20 a month deducted from my pre-tax income, and get a voucher for the deducted amount to spend at a ‘dedicated’ bicycle shop. The $20 benefit is intended to reimburse you for bicycle related expenses like bikes, helmets, repairs, locks, etc. Thus, my pre-tax salary would be $20 less, but I would get a $20 voucher. My employer could instead choose to just give me a voucher as a subsidy, and this would be tax-free for them. It’s up to the employer if they implement the benefit as a pre-tax benefit or a subsidy — the latter is obviously a greater benefit to the employee, but a greater immediate economic cost to the employer.

All of these numbers are a minuscule fraction of the size of tax perks related to driving. These new bike benefits are similar (but smaller and more restricted) to commuter transit benefits and parking benefits. The same tax provision amended by this law already gives up to $230 a month for car parking and up to $120 for transit fares, but only $20 for bicycling expenses.

The anticipated cost of the new bike benefit is a tiny $1 million per year, compared to $4,400 million ($4.4 billion) the government already spends for parking and transit benefits according to the Congressional Joint Committee on Taxation.

I currently get a commuter transit benefit in the form of discounted bus tickets every month — my employer pays for $4 of these a month, so I can get $10 worth of bus tickets and my pre-tax salary is $6 lower than it would have been. If I started getting this bike benefit, I could no longer get the bus tickets. This means folks who do a combined transit and bike commute could only get one of the types of benefits.

The voucher piece seems crappy to me. Employers can provide a cash benefit instead of a voucher, but because they might have to track receipts, most employers are expected to use the vouchers. Why is this little bike benefit so much more restrictive than the much larger benefits for auto-drivers? What does it take for a place to count as a “dedicated bicycle shop”? Could a time-and-money-donation-based non-profit bike co-op count? I cannot imagine you could use such a voucher to buy a second-hand bike or parts on craigslist. What about at a general sports store (which, in some places, might be your only option for buying new shiny bike equipment)?

The voucher system assumes we are now spending money if we need bike maintenance, and offers vouchers which we can instead spend. For those who prefer other economies (like volunteering at a local bike collective in exchange for tool use, or baking some cookies for our friend the bike mechanic), the voucher isn’t as valuable.

I work for a midsized constituent of the nonprofit industrial complex, where a decent amount of people bike to work regularly. When I learned about this benefit, I asked the human resources folks about signing up. It turns out that somebody else had already asked (the day the bill passed!), and they said they were looking into it. A few weeks later I asked again, and they emailed to say they were still looking into it. I have no idea what will come next, but I’m not actually interested in signing up — I’ll keep my transit passes.

The bill is motivated by a nice idea — since there are federal programs to encourage people to drive to work, there should also be incentives for bicycling. Maybe the reason the law falls short is that biking is already so cost effective, and so easy to participate in outside of the capitalist economy that offering bikers vouchers to bike shops doesn’t seems like such a great perk, as many of us bikers don’t regularly spend money at bike shops. Similarly, walking is a great way to get to work, but that has nearly no direct costs, so it’s not clear what sort of benefit the government could provide — new shoes? Affordable centrally-located housing would encourage human-powered transit, but that’s not the sort of thing that can hide in a government bailout bill. Maybe the best way to encourage biking and walking is making them easier, safer and less stressful by having less cars on the roads.

In other bike law news, in Idaho, bikers don’t have to stop at stop signs. Similar bills have been proposed for Oregon and Montana.