🔒CT lawmakers propose expanding 50% commuter tax credit for business, providing $9M more for microtransit program

The state legislature is considering a bill that would significantly expand eligibility for a tax credit for businesses that participate in a traffic reduction program, while also appropriating $9 million to continue a pilot program testing so-called “microtransit” services. Senate Bill 9 was introduced by the legislature’s Transportation Committee and has 29 co-sponsors, all Democrats. The bill is one of 18 on the committee’s agenda for final consideration during its meeting on Monday morning. Under the bill, eligibility for the tax credit would be greatly expanded for a voluntary traffic reduction program created to achieve the goal of the federal Clean Air Act. The current law excludes businesses with fewer than 100 employees from being eligible for a tax credit for participating in the program. The bill would change that to exclude only businesses with fewer than five employees. The bill would allow businesses to take a tax credit equal to 50% of the amount spent in the state for “the direct costs of traffic reduction programs” and related services. The bill limits the tax credit to no more than $250 annually per employee “participating in alternative means of commuting” as part of a traffic reduction program. To receive the credit, an employer must submit a plan and an annual update to the state Department of Transportation describing the measures implemented to reduce “single-occupancy vehicle trips to and from” the employer’s work location. The bill also requires the commissioner of DOT to work with chambers of commerce, community-based organizations and business advocacy organizations to develop and conduct a public awareness campaign about the tax credit. The legislation also would require the DOT commissioner to submit a report no later than Jan. 1, 2028, on the status of the state’s microtransit program and recommendations about expanding the program. In March 2024, the state began a two-year pilot microtransit program providing on-demand shuttle rides in nine defined areas that was funded with $19.5 million. On its website, the DOT describes microtransit service as “an accessible, on-demand mode of transportation that allows customers to use a smartphone app or telephone number to request and schedule a ride within designated service areas.” According to the DOT website, the pilot state microtransit program includes nine services serving 17 towns: • VTD2GO, serving Ansonia, Derby, Shelton • GHTD Link, serving Enfield and East Windsor • HOP & New London Smart Ride, serving Groton, New London, Stonington and Waterford • Milford Micro • Wheels2U, serving Norwalk, and • XtraMile, serving Middletown, East Hampton, Madison and Guilford. In addition to requiring the report on microtransit, SB 9 appropriates another $9 million to DOT from the state’s Special Transportation Fund for the fiscal year ending June 30, 2027, to continue the pilot program. In testimony submitted to the Transportation Committee during a public hearing held Feb. 23, Danielle Cloud, policy director for the Connecticut Business & Industry Association, said her organization supports the bill. Cloud said the bill “takes a practical approach” to encouraging voluntary business participation in commuter solutions via the expanded tax credit, and adds that lowering the eligibility threshold allows more businesses, and especially small and mid-sized businesses, to participate. She also praised the microtransit program. “These on-demand, shared-ride services have helped bridge first- and last-mile gaps in communities where traditional bus routes may not be available,” she said. The Transportation Committee is scheduled to discuss the bill at its meeting Monday at 10 a.m. in Room 1D of the Legislative Office Building in Hartford.