Port Authority of New York and New Jersey

Administration of the TransitChek Program

In 1987, the Port Authority of New York and New Jersey established the TransitChek program, in which participating employers in the New York City metropolitan area may provide their employees with a nontaxable benefit of as much as $65 a month in mass transit tokens/tickets or specially designed TransitCheks that can be used to purchase tickets, tokens and passes from participating mass transit agencies. Employers must purchase TransitCheks at face value from the Authority, which charges a 4 percent administrative fee for each TransitChek sold. During the three years ended December 31, 1995, the costs of administering the program exceeded program revenues, resulting in the payment of about $2.4 million in operating subsidies by the participating mass transit agencies. We examined the Authority's administration of the TransitChek program and found that improvements are needed. For example, when we compared the program to TransitChek programs in six other municipalities, we found that none of the six programs need operating subsidies from participating mass transit agencies and none charge participating employers more than a 2 percent administrative fee. We recommend actions that could result in lower operating costs and more effective marketing efforts for the TransitChek program.

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