The MBTA should look to the corporate world for more riders — and more money, a new report from the Pioneer Institute argues.
The right-leaning Massachusetts think tank called on the T to boost marketing of its corporate pass program, which allows companies to either outright buy passes for workers or allow employees to buy monthly cards using pre-tax earnings, effectively getting a discount on the cost.
According to Pioneer, about 350,000 employees have access to the corporate pass program, and about 117,000 use it. Pioneer thinks both those numbers could be much higher.
Pioneer is calling both on the T to increase its marketing of the initiative and for companies that don’t offer the benefit to consider doing so. The T could also consider discounting the passes through the program if it would lead to greater enrollment, the report suggested.
Boosting enrollment could increase annual MBTA revenue by as much as $51 million, depending on how many companies and employees bite, the Institute said.
But Pioneer acknowledged some unknowns: It’s not clear, for example, whether many of those would-be enrollees already pay MBTA fares outside of the corporate pass program. Converting them to the corporate pass program would not result in any net gain for the T.
Meanwhile, the new federal tax law passed late last year might have eliminated some incentive for companies to pay for transit passes. In the past, companies who paid for some or all of their employees’ fares could deduct that amount from their taxes; that is no longer allowed. However, it is far more common for companies to allow employees to use pre-tax earnings to pay for passes, and the rules around those benefits were not changed by the tax law.
The MBTA says revenue from the corporate pass program has grown by 16 percent since 2015, and General Manager Luis Ramirez recently said the T is hoping to boost enrollment even more. Under the Baker administration, the T has tried to address budget problems by focusing on cutting costs and increasing revenue from fares and other sources like parking and revenue.
The Pioneer report comes weeks after the more liberal Massachusetts Budget and Policy Center published a report arguing the T is underfunded because the agency has not received as much revenue from the state sales tax as previously projected.
That group suggested the budget gap could be partially addressed by a possible ballot question this fall that would impose a new tax on incomes of more than $1 million to fund transportation and education needs.