New Law Offers a Pay Raise for Not Driving to Work

Maryland Governor Parris Glendening today signed into law a first-in-the-nation measure that gives employers a strong positive incentive to pay their employees added income if the employee agrees to give up a parking spot at work.

It is also the first law in the nation to extend tax credits to not-for-profit organizations, such as schools and medical centers, if they pay for employee transit benefits or other “pay-me-not-to-drive” incentives. Valued at half of whatever an employer pays towards an employee’s transit or vanpool commuting costs, the tax credit is worth up to $30 per employee each month. Employers can also take the tax credit if they boost the pay of employees by the fair value or cost of a parking space that employees pledge not to use, typically $3 or more a day. The measure (SB 244), supported by both business and environmental groups, will help address traffic and air pollution problems and give a special pay boost for lower wage workers while saving employers money.

“With this law, Maryland has established a new national model for smart commuter incentives. The law helps level the playing field for commuter choices, so we can all spend less time stuck in traffic and breathing dirty air,” said Michael Replogle, transportation director of Environmental Defense. “This is a cheaper, faster, and more effective way to address congestion and pollution problems than building new highways.”

The law goes into effect January 1 2001. An existing tax credit, which took effect January 1 2000, applies only to transit and vanpools and is available only to for-profit employers.