CTA BOARD APPROVES RTA/CTA TRANSIT BENEFIT PROGRAM

June 16, 1999
06/16/99

The Chicago Transit Board today approved an ordinance allowing the CTA to enter into an intergovernmental agreement with the Regional Transportation Authority (RTA) to jointly market a transit benefit program. This program allows both companies and employees to take advantage of recent tax law changes designed to reduce commuting costs.

Beginning July 15, 1999, the RTA and CTA will market the RTA/CTA Transit Benefit Program to the regions. Under the new agreement, which takes effect on July 1, 1999, the RTA and CTA will market the program to the region's employers offering both RTA Transit Checks? and CTA fare cards as a tax-free benefit.

This program takes advantage of changes in the tax code under the Transportation Equity Act for the 21st Century (TEA-21), which permits employees to set aside up to $65 per month of their pre-tax earnings to cover their transit costs. Employers participating in the program save on payroll taxes while employees will be able to cover at least a portion of their transportation costs with tax-free dollars. Employers can also now give their employees some amount of their commuting expenses tax-free and let employees set aside pre-tax income to pay the remaining amount up to the federal monthly limit of $65.Employees setting aside the maximum monthly benefit can save more than $200 a year in taxes. In addition, the program also provides a unique recruiting and retention tool while positively affecting the environment through the use of public transportation.

Through the new RTA/CTA Transit Benefit program, all orders will be fulfilled through the RTA's current vendor, The Voucher Corporation, with fulfillment costs paid for by the RTA. Participating organizations will be able to use a combined form, thereby creating a seamless, integrated process for purchase of CTA Transit Cards and Transit Checks?. In addition, new customers will be solicited by both the RTA and the CTA through a coordinated marketing effort.

"This Transit Benefit program allows companies to take advantage of our CTA Transit Cards, while still allowing employers the option to use Transit Checks? as well," said CTA Board Chairman Valerie B. Jarrett.

By working in concert with the RTA to offer a single order form to businesses, county, state and federal organizations, the CTA would be able to increase revenue and ridership while promoting region-wide transit use.Including both Transit Checks? and CTA Transit Cards in the same program greatly simplifies implementation of the program for employers and will allow more employees to enroll.

Participating businesses can purchase CTA Fare Cards in denominations of $30, $35, $60 or $65 and will receive the standard $1.00 bonus for every $10.00 spent on a CTA Fare Card. Or they can also purchase Transit Checks in the denomination of their choice.

Currently $65 per month, the maximum allotment will increase to $100 per month in 2002.

CTA President Frank Kruesi added, "This simpler Transit Benefit program is a great benefit for our customers. It will encourage more organizations to sign up for the program given the ease of implementation and the improved range of options available."

?By combining our marketing efforts, the RTA and the CTA will be able to reach even more of our region's riders," said RTA Chairman Thomas J. McCracken, Jr. ?This program is a winner for everyone. It's a tax break for riders and employers and it's a great incentive for more people to use our transit system."

The RTA/CTA Transit Benefit Program agreement will go before the RTA board for approval next month. The program is expected to go into effect on July 15, 1999.

The changes under TEA-21 have already positively impacted the number of companies participating in the RTA Transit Check? program. Some 229 companies joined the program in 1998 and by January 1999, more than 28,000 vouchers were being processed each month. In 1999, the program expects to double these totals. Between January and May 1999, 258 new companies have signed on to the program.

Companies interested in receiving more information or participating in the RTA/CTA Transit Benefit Program should contact the Transit Benefit Hotline at 312-396-8450.

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