Starting in January, New York City will offer tax-free transit benefits to its workers. Mayor Giuliani has agreed with the city's largest union, District Council 37 of the American Federation of of State, County and Municipal Employees, to offer the benefit to over 150,000 NYC employees. Hundreds of private employers already participate in the "TransitChek" program, which exempts up to $65 per month spent on mass transit from federal income taxes. Many participating employees save over $200 per year and employers save over $50 per participating employee in payroll taxes.

New York City workers already represent about 60% of non-federal U.S. employees taking advantage of the federal transit tax benefit. TransitCenter, the organization that administers the TransitChek program in the metropolitan area, expects at least 75,000 city employees to begin participating in January, boosting NYC's share to over 80%. Participation in New York City alone is expected to double.

According to Jeff Goldstein of the United Federation of Teachers, NYC Board of Education employees anticipate the program being extended beyond D.C. 37. "A lot of teachers have parking problems now. Tax-free transit benefits would definitely help encourage some teachers and other Board of Education employees to take the train or bus to work instead of driving." Goldstein applauded NYC officials' support for the program.

A new program is now being designed to accommodate the large number of city employees. Under the existing program, used by hundreds of private employers, Transit Center provides each employer with TransitChek passes which are distributed to participating employees each month. Under the new program, City employers will contract with Transit Center and sign up for a payroll deduction. Employers will withhold money from participating workers' paychecks and employees will receive a single tax-free monthly NYC Transit card directly from TransitCenter (non-uniformed city workers must be city residents by law). TransitCenter and NYC Transit will automatically re-value the city workers' transit cards each month. TransitCenter also plans to help the City advertise the benefit to employees.

The city program is a win for all parties. NYC Transit will sell more monthly passes, transit ridership may climb and money that would have gone to Washington will stay in the NYC economy. Mayor Giuliani could take a further step away from gridlock by combining the step with a reduction in city-issued parking permits