Schumer proposes tax breaks for ailing Citi Bike program

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Chuck Ross Investigative Reporter
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If New York Democratic Sen. Chuck Schumer gets his way, New York City’s ailing bike-share program — initially touted for its reliance solely on private funding — will benefit from government tax breaks.

Schumer announced Thursday that he had successfully attached an amendment to a “must pass” tax bill which will provide two tax incentives that would seemingly aid the bike program.

Under the proposal, employers who pay for their workers’ annual Citi Bike memberships — which cost $95 — can write off the expense on their taxes. Additionally, users will be allowed to exclude up to $20 a month from their pre-tax income.

“This legislation will encourage employers to offer bike-share memberships as perks to their employees, much like transit benefits for other kinds of commutes, and will enhance both the financial standing and the importance of these programs,” read a statement from Schumer.

The lawmaker says that the proposal would bring the Citi Bike program up to par with other forms of transportation which currently receive tax breaks.

Schumer’s amendment, he says, is a fix to an IRS ruling from last year which said that bike share memberships are not eligible under the Transportation Fringe Benefit clause of the IRS code.

Citi Bike has been regarded as an ambitious program since its inception. The program is different than those in other major cities in that it has been privately financed, mostly by Citigroup but also by other companies like MasterCard and Goldman Sachs. (RELATED: Report: Bike-share program in financial trouble)

While pitching the program, then-New York City Mayor Michael Bloomberg touted its reliance on those private dollars, which included a $41 million investment by Citigroup, whose name is etched on all of the city’s 6,000 blue cycles.

“The $41 million agreement will allow the nation’s largest public bike share system to be provided at a low cost to users and at no cost to taxpayers,” reads a 2012 announcement from Bloomberg’s website.

“We’re able to create this new option at no cost to taxpayers because of the commitment of an institution with a 200 years tradition in New York: Citigroup,” said Bloomberg in the statement.

Citi Bike’s financial viability has faltered since it was fully opened to the public last June. A Wall Street Journal article put the program’s deficit in the tens of millions of dollars.

While the program is somewhat popular among New Yorkers — it has around 100,000 subscribers — visitors and tourists have not embraced it as quickly as many had hoped. Those short-term users pay higher usage rates — $9.95 for the day ride and $25 for the week.

Citi Bike has also been marred by maintenance and technology problems at its 330 stations throughout the city. One issue is the amount of manpower required to change out batteries at the 330 stations spread throughout the city. The program has also struggled responding to commuters’ usage patterns.

With his proposed bailout, Schumer is taking a different tack than current New York City Mayor Bill de Blasio. Though a champion of progressive causes, de Blasio said last month that the city would not provide space in its budget for the program. He would, however, work to make the bike-share program more efficient.

Citi Bike’s operator, NYC Bicycle Share, is hailing Schumer’s amendment.

“We commend Sen. Schumer for bringing forth this legislation,” Dani Simons, NYC Bicycle Share’s director of marketing and external affairs, told The Daily Caller News Foundation.

“We have gotten scores of requests from businesses and individual employees who want to use the commuter benefits program to purchase Citi Bike memberships,” Simons added. “This legislation would make bike share an even more attractive option for commuters.”

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