Transit Action Network (TAN)

This Wednesday the Kansas City Planning, Zoning and Economic Development Committee will hear testimony on a proposed ordinance sponsored by Councilman Russ Johnson.

ORDINANCE NO. 140518   Full Text KCMO_Legislation_140518

Amending Chapter 74, the Kansas City Redevelopment Ordinance, by adding a new Article VII, Public Mass Transportation Benefit Plan, for the purpose of requiring that certain public mass transportation benefits be provided to employees as a requirement of any economic development project utilizing tax increment financing, receiving tax abatements or financed with tax-exempt instruments.

The basic idea is large companies, with more than 100 full-time employees, that receive a tax incentive from the city would implement a Group Transit Plan through KCATA providing free bus passes to eligible employees for the length of the public incentive.

A Group Transit Plan is a relatively new concept in our region started by KCATA several years ago with UMKC. All students pay a small student fee per semester and their UMKC ID badge functions as a bus pass on KCATA buses. This program was recently extended to Rockhurst University. Kansas City used the same concept to work with KCATA and develop a bus pass for all employees as part of their City ID badge. Regular KCATA METRO bus passes cost $50 per month. KCMO is paying $30 per year per person for employees to have a bus pass this year. The cost may be adjusted next year as the city and KCATA evaluate the program. This new benefit for City employees went into effect in July.

This ordinance would require companies receiving a tax incentive to purchase a similar bus pass for their employees, IF KCATA works out a group plan for them at “Ordinary and Customary Charges.” The final draft of the ordinance will probably have a cap on the amount of money a company would have to pay for this employee benefit. Right now they are talking about a cap of 0.1% of the employer’s total gross payroll for the eligible employees.

This new ordinance would not affect any current tax-incentive plans. If the Kansas City Streetcar Authority has monthly passes in the future, they would come under this ordinance. Tax Incentives are programs like TIF, but the city has a lot of additional tax-incentive programs. Small companies are not affected by this ordinance.

As transit advocates we hear a lot of lip service given to public/private partnerships as a way to pay for transit, but rarely does this talk turn in to anything as tangible as improvements for service or riders. We don’t know how many companies or employees this ordinance will affect in the future, maybe not many. Maybe a lot. We don’t see this ordinance harming large corporations like CERNER, which would be one of the first companies to fall under this new ordinance as it finalizes its large tax incentives for developing the old Bannister Mall site into a new CERNER campus.

The potential benefit to employees (riders) is great and the cost is relatively small per person per year for the companies that would be subject to the ordinance.

Many large employers in Kansas City already provide either free or subsidized monthly bus passes to employees who use transit. Today a company can purchase a METRO $50 monthly pass for $45. Companies that provide these passes free to employees are paying $540 per year to provide an employee that transit benefit. Whatever a Group Transit Plan costs a company per employee, that company will receive a huge discount for a yearly pass. The difference with this plan is that everyone in the company, at that location, would receive a bus pass. This is a great way to encourage transit.

Considering the subsidies to parking that these tax-incentives usually provide, the Group Transit Plan is a small way to be more mode neutral.

Programs with potential to increase transit ridership by giving employees an incentive to use public transit in a cost-effective manner should be implemented.