For lapsed LIRR riders with funds locked in transit accounts, a bill could be the key

Federal lawmakers from Long Island proposed a bill Thursday that would allow lapsed LIRR riders to recoup money that’s been locked in transit benefit fund accounts since the beginning of the COVID-19 pandemic.

The bipartisan COVID-19 Commuter Benefits Distribution Act, authored by Rep. Kathleen Rice (D-Garden City) and co-sponsored by. Reps. Tom Suozzi (D-Glen Cove), Andrew Garbarino (R-Bayport), Lee Zeldin (R-Shirley) and Rep. Gregory Meeks (D-St. Albans), would “allow for one-time distributions from certain transportation fringe benefit accounts.” A Senate version of the bill will be co-sponsored by Sens. Chuck Schumer and Kirsten Gillibrand of New York.

“People are suffering economically,” Suozzi said. “This is a common-sense fix, and it’s fair.”

The legislation aims to address a situation faced by thousands of former LIRR commuters who stopped taking the train to work around the beginning of the pandemic in March 2020 and never returned.

Pretaxed money that was deducted from their paychecks monthly remains trapped in special accounts overseen by benefit administrators like WageWorks. IRS rules prohibit the funds from being withdrawn, refunded or spent on anything other than transit costs.

Schumer's office said he will look for the best path for passage of the legislation, including by potentially packaging it in a "must-pass" bill.

"Amid COVID uncertainty, many people’s cash piled up in an account the commuter cannot access for other uses," Schumer said. "This legislation would provide a pathway for New Yorkers to access their hard-earned money — funds that could be used by families to purchase household essentials, pay bills, and recover from the pandemic.” 

The legislation would apply to commuters throughout the United States enrolled in eligible transit benefit programs, but it could be especially helpful to former commuters on the LIRR, the largest commuter railroad in the country with some of the highest fares.

The bill gives Christine Gietschier some hope of being reunited with $1,900 that she had set aside for her LIRR ticket costs. Like many others, she was slow to cancel the deduction, assuming she’d be able to use the funds once she returned to the office. Instead, in April of last year, Gietschier retired.

“It was just an unforeseen circumstance that I just happened to decide to retire, and no longer go through that commute anymore,” Gietschier said. “I could definitely use that money . . . and if it has to be taxed, I understand that, too.”

Desperate to recover some of the funds, some have taken to social media in search of other commuters willing to buy a ticket off them — sometimes at a discount. 

The LIRR Commuter Council, the railroad’s state-regulated rider advocacy group, pushed for years for a change in the IRS rules to allow for refunds to be issued. Although he wishes the matter was addressed quicker, council chairman Gerard Bringmann said he’s gratified that something is finally being done about it.

“It’s unfortunate that we had people who had to go out and sell their tickets in parking lots to try to recover their money, because we didn’t know, for sure, that this was going to happen,” Bringmann said. “COVID hit us hard enough. And then to lose this money on top of it was like salt in the wound.”

The bill would allow for a “one-time payment” made within six months after the enactment of the law.

The refunded money would be considered taxable income. Bernie Poelker, of Babylon, said he’s “perfectly fine with that.”

Poelker, 65, was laid off from his finance job in March 2020, and after looking for work for several months, eventually retired — with almost $600 sitting in an LIRR Mail & Ride account for which he has no use.

“That definitely gives me a glimmer of hope that there’s potentially a way to get these funds back to me,” he said. “My thoughts were, ‘Give me my money, take the tax out, and we’ll call it a day.’ … Getting some back is better than none.”

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.