A Benefit Purpose-Driven Leaders Should Reconsider

On a recent Tuesday evening, I stepped into Boston’s gorgeous Symphony Hall with throngs of people, plenty of security, and much of the Massachusetts political establishment. The occasion was Boston Mayor Marty Walsh’s State of the City address, an annual opportunity to recite accomplishments, announce new policie, programs, and benefits, and highlight problems to be solved.

The good news? Boston is thriving. However, with that success comes two major problems: a lack of affordable housing and the nation’s worst congestion. The Mayor announced an ambitious housing investment. However he has limited ability to influence transit, which is governed at the state level. Boston doesn’t even have a seat on the MBTA board, despite its citizens being the greatest users and contributors to the system. This fact led to the best line of the night when Mayor Walsh said, “Bostonians are not fans of taxation without representation. We need a voice.”’

What Mayor Walsh didn’t mention is the troubled transit system is only one factor contributing to an estimated 1.7M people a day who drive alone to work. Employers also subsidize parking and a federal tax credit exists for parking benefits of up to $270 per person per month. Critics point out that tax break is not only regressive, benefitting primarily affluent individuals, it encourages cars to enter the roads at the worst time–rush hour–in the worst places.

Congestion also means carbon. The most recent estimate is that 29% of Boston’s carbon emissions come from transportation, but that’s just in the city itself. Most car commuters don’t live in Boston. Statewide, transportation accounts for 43% of total emissions, about half of that from passenger vehicles.

One of the fastest ways to change behavior would be to eliminate employer parking subsidies or programs that offer pre-tax benefits for parking. An analysis of what would happen under various scenarios by the Transportation Center estimates that if employers in major cities stopped subsidizing parking and only subsidized public transit, the percentage of car commuters in their workforce would plunge from 64% to 19%. A real-life test at MIT led to a 12% drop in parking at their facilities when they only partially subsidized parking and added bigger incentives for public transit.

I’m well aware that removing an existing benefit is hard. Those who are using it will be upset. As part of a transition, you could offer to subsidize parking costs at commuter rail stations, but not in the central city. If you don’t already support remote work and flex-time, offer it or expand it as well. If you were subsidizing parking, you can reinvest those funds into something that directly benefits employees in another way, like drinks and healthy snacks. Employers should not only support the use of public transit, but actively ensure the systems in your markets receive adequate investment and government support.

I believe that now is an opportune time for difficult discussions with employees about carbon, climate, and behavior. People are horrified by what’s happening in Australia and California and wondering what they can do. Most will grudgingly respect that you are looking at all your benefit policies and procedures, and doing whatever you can do to make a difference.

Quote of the Week:  “All taxes discourage something. Why not discourage bad things like pollution rather than good things like working or investment?”

Lawrence Summers

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