New York's congestion pricing plan

Should New York City’s congestion pricing plan have been suspended? Viewpoints from multiple sides.

Jun 14, 2024

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What’s happening

Last week, New York Governor Kathy Hochul suspended a congestion pricing plan that would have charged motorists a fee for driving into Manhattan south of 61st Street (the “congestion relief zone”). It was scheduled to take effect on Jun 30 and would have been the first program of its kind in the US.

The plan: Under the plan, drivers of cars entering the congestion relief zone would be charged $15 during peak hours (5am - 9pm on weekdays and 9am - 9pm on weekends). Small trucks would be charged $24 and large trucks $36. The plan would also provide discounts and exemptions, including those for qualified low income residents, individuals with disabilities, public service vehicles, and vehicles entering the city via one of four tolled tunnels.

Its purpose: The program’s stated goals are to reduce traffic congestion, improve air quality, increase transportation efficiency and safety, and raise money for transit improvement projects. It is expected (and required) to generate $1B annually in toll revenue, which the Metropolitan Transportation Authority (MTA) would use to secure $15B in loans to fund transit improvement projects.

The plan had been in the making for roughly a decade and was first signed into law in 2019 by former Governor Andrew Cuomo. Prior to Hochul’s suspension, the city had signed a $507M contract with a vendor to install and operate the tolling infrastructure, the installation of which had largely been completed.

Why it was suspended: In a statement announcing the suspension, Hochul cited the importance of not disrupting New York’s ongoing economic recovery from the COVID-19 pandemic and the burden it could place on lower-income residents already struggling with inflation. Hochul has not announced timing of revisiting the decision.

Reactions: The suspension announcement was met with a wide range of responses. There are staunch opponents to congestion pricing in New York, who tend to cite its potential financial burden on residents and unproven upside. Supporters of the plan emphasize the importance of improving mobility around the city and the success of similar measures in cities internationally.

This week, we bring you the viewpoints from multiple sides. Let us know what you think.

Notable viewpoints

Supportive of congestion pricing plan:

The plan would reduce congestion and improve air quality.

The plan is expected to reduce congestion in Lower Manhattan by 17% (100,000+ vehicles per day), which would significantly improve traffic and reduce air pollution from motorists.
Cities such as Stockholm and London have implemented similar plans with success; Stockholm saw a 50% reduction in childhood asthma cases and London experienced a 16%+ reduction in greenhouse gas emissions within its first year.
In a city where congestion problems and delays are rampant and diminish the quality of life for residents – for example during 2017’s so-called "summer of hell" – the plan would drastically improve mobility.

Congestion pricing would likely have minimal impact on lower-income citizens.

Congestion pricing would mostly impact delivery trucks and commuters driving to Lower Manhattan, who are primarily higher-income earners, according to a study by the Federal Highway Administration (FHWA).
A 2017 Community Service Society study found that outer-borough and low income residents would not be significantly impacted by NYC congestion pricing; it estimated that 4% of outer-borough residents commute by car to Manhattan and just 2% of the working poor would pay a congestion fee.
The MTA Traffic Mobility Review Board estimated that only 1% of people who work in the planned congestion zone drive and have household income less than $50,000; many of these workers would qualify for discounts or exemptions.

The plan would support important transit improvements and benefit New York economically.

Improvements to buses and subway systems funded by congestion tolls would include 500 new buses, better accessibility at 40 subway stations, improved signals for subway trains to run faster with fewer interruptions, and an extension of the 2nd Avenue subway to Harlem.
Pausing the program will cost an estimated $20B per year in lost productivity due to congestion and related efficiency losses.
Without a $15B loan enabled by congestion pricing revenue, the MTA will have to compete with other state interests for funding and draw against state budget reserves; Hochul’s proposal to supplement funding with a payroll tax hike on businesses was shut down by state legislators.

Key groups support the plan and popular support would increase over time.

A variety of experts including those focused on health and transportation, public policy, and the environment all support the congestion plan.
Opposing new taxes and fees is common among a voter base; however, as happened in cities like Stockholm, Oslo, and London after implementing congestion pricing, residents would likely grow to support the New York program once they saw its benefits.

Implementing congestion pricing would promote New York’s position as a national and global leader.

New York City should be leading the world in urban transportation and development as it did in previous centuries and congestion pricing gives it the opportunity to shape a more prosperous future.
With already such unappealing consequences of using cars in NYC compared to other cities, the potential failure of the congestion pricing plan suggests similar reform anywhere in the US might be impossible.

Opposed to congestion pricing plan:

The plan would shift air pollution and congestion to other parts of the New York area.

New York’s congestion pricing would redistribute car traffic and air pollution to areas outside the city including the New Jersey suburbs. (Summarized from a lawsuit brought by New Jersey Governor Phil Murphy attempting to block congestion pricing.)
According to the MTA’s own 2022 Environmental Assessment, congestion pricing could push air pollution to other parts within the city such as the South Bronx from cars detouring around the congestion zone.
The Federal Highway Administration (FHWA) failed to properly analyze congestion pricing’s environmental, economic, and transportation effects and improperly found it would have minimal negative impact on New Yorkers. (Summarized from arguments by plaintiffs in lawsuits attempting to block congestion pricing.)

Congestion pricing unfairly disadvantages certain groups.

The congestion plan places an unfair financial burden on individuals living in suburbs and boroughs outside Manhattan that lack convenient transit access.
A $15 congestion fare would make it more expensive for public sector workers such as ambulance operators to commute to work; public sector workers commute from outer suburbs due to already untenable NYC living costs.
Congesting pricing would disadvantage the working class that need to drive into the city for their work (e.g., contractors); annual tolls could reach an estimated $3,700 per year.

The plan would hurt New York economically.

Congestion fees would discourage people from going to work, play, and shop in the city, hurting businesses during a time when the city is still trying to rebound from the pandemic.
While congestion pricing is ultimately good policy, now is not the time to enact it when office vacancy in New York City is still 48.9% and the city hasn’t recovered from COVID-19.
Businesses would pass on increased costs from the congestion surcharge to consumers, which would raise costs of goods and services across the already unaffordable city.

A majority of New York-area residents are opposed to the plan.

A statewide poll in Apr 2024 showed that 64% of city residents and 63% of voters statewide (including 54% of Democrats) opposed congestion pricing while only 25% of statewide voters supported it.
A variety of groups including the city’s teachers union, New York lawmakers from both parties, resident organizations, the Staten Island NAACP, the Trucking Association of New York, and New Jersey Governor Phil Murphy filed or backed lawsuits to block the plan.

The MTA is already bloated and should not be funded through congestion tolls.

The governor should force the MTA – which has a bloated $7.8B payroll and spent a record $1.4B on overtime in 2023 – to manage its finances better rather than depending on congestion tolls to fund it.
The city could save millions by cracking down on farebeaters rather than increasing taxes on New York commuters; during Q3 2023, faredodging on bus lines was practiced by an estimated 41% of commuters and 14% of subway riders; the MTA lost an estimated $690M from unpaid fees in 2022 (latest year of complete data).

Other viewpoints:

Governor Hochul’s decision to suspend the plan was politically motivated.

Governor Hochul likely postponed congestion pricing to appeal to voters opposed to it in suburban areas like Long Island, where her Democratic party is aiming to win elections for House of Representatives seats in November.
In Dec 2023, Hochul received $18,000 in campaign donations from lobby group Greater New York Automobile Dealers Association, which has publicly opposed the plan; Houchul’s history of receiving campaign donations from auto groups suggests her suspension decision was influenced by the lobby.

Hochul’s late reversal sets a bad precedent for future resolutions.

Hochul’s last-minute postponement sets a bad precedent that may reduce the perceived validity of the lawmaking process and encourage future “anti-change” groups to attempt reversing government resolutions.

The congestion pricing plan was doomed by how it was framed.

Former Governor Cuomo’s requirement that the congestion pricing plan generate $1B annually for the MTA put its emphasis on revenue generation over congestion improvements, a misstep that likely drove it to lose public support.

Suspending the plan now is not legal.

Hochul’s decision violates the 2009 Public Authorities Reform Act that requires the MTA board to make decisions as an independent body; the decision would also likely be ruled “arbitrary and capricious” in court.

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