(Bloomberg) — Congestion pricing will finally take effect on Sunday in New York City, though its long-term future still remains uncertain.
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Drivers entering parts of Manhattan will be charged $9 during peak hours in a program following similar initiatives in London, Stockholm and Singapore that aims to reduce the worst traffic in the world. The first initiative of its kind in the US, congestion pricing promises to bring $15 billion to the Metropolitan Transportation Authority, the agency that runs the city’s century-old subway and commuter-rail lines, for desperately needed upgrades.
“We’re doing something to deal with the reality of the way that congestion is hurting our city and costing people time and money, that we’re protecting the interests of New Yorkers from a health standpoint,” Janno Lieber, the MTA’s chief executive officer, said late Friday after a judge ruled against New Jersey’s request to stop the program from starting on Sunday.
New York may present a model for developing additional revenue sources for transit, said Tiffany-Ann Taylor, vice president for transportation at the Regional Plan Association, which works to improve the economic health and quality of life in the region.
The debut follows years of political bickering and scores of legal challenges. That includes an 11th-hour attempt to block its implementation by neighboring New Jersey, which is appealing a federal judge’s decision to allow the program to begin. The Federal Highway Administration faces a Jan. 17 deadline to file additional information on efforts to mitigate the tolling plan’s potential effects on traffic and pollution in the Garden State.
A change in administrations in Washington three days later on Jan. 20 also looms large over the tolling plan. In November, President-elect Donald Trump called the charge a “regressive tax” and said it would be “virtually impossible” for New York City to come back if congestion pricing is in effect. Trump may seek a longer environmental review of the program though a legal suit or find a way to stop the tolling through administrative action, according to Brad Lander, New York City’s Comptroller.
The judge in the case, Leo Gordon, is also asking for additional filings beyond Inauguration Day.
Congestion pricing has taken a long and tortured path since it was proposed in 2007 by then-Mayor Michael Bloomberg, the founder of Bloomberg News parent Bloomberg LP. State lawmakers needed to craft legislation to kickstart a process filled with cycles of considerations and approvals, eventually approving the concept in 2019. Then, a tolling structure had to be created. Rates needed to be high enough to discourage driving and shift motorists to public transit, but not so burdensome that they crippled local businesses and the broader economy. About three weeks before the plan was supposed to start last June, New York Governor Kathy Hochul said an initial $15 charge was too large and paused its launch.
Transit enthusiasts, environmental advocates and some business groups highlight the program’s goal of boosting public-transportation ridership, reducing air pollution and decreasing traffic in one of the most congested urban areas in the world. The MTA will use revenue raised from vehicles traveling south of 60th Street into the central business district to extend the Second Avenue subway to Harlem, modernize train signals from the 1930s and make more stations accessible.
About 1.3 million people take public transportation into the district for work compared with 143,000 who drive, according to the MTA.
“Several million people ride the subway every day, so fixing it is not optional,” said Danny Pearlstein, policy and communications director for Riders Alliance, a transit advocacy group. “It’s necessary for the future of the city and the state’s economy to thrive.”
Still, some elected officials in New York and New Jersey warn the new fee will hurt small businesses in the tolled zone and imposes another financial burden on their residents.
“Maybe fewer cars and trucks will go south of 60th street in Manhattan, which may help some fancy folks living in lower Manhattan, but what about the people here in northern New Jersey?” US Representative Josh Gottheimer, a Democrat of New Jersey, said during a news conference on congestion pricing. “What about all those people in the outer boroughs of New York?
Passenger cars with an E-ZPass will pay $9 once a day to enter the tolled area during peak hours, but will receive credits of between $1.50 and $3 if motorists already paid tolls on certain tunnels headed into Manhattan. Smaller trucks with an E-ZPass will pay $14.40 every time they enter the district during prime hours, with tunnel crossing credits of $3.60 to $7.20.
Passengers in for-hire vehicles like Uber and Lyft will pay a per-trip charge of $1.50 while riders in taxis will pay a 75-cent fee.
There’s no toll on the West Side Highway or the Franklin D. Roosevelt East River Drive, but motorists will pay the fee if they leave those highways and enter the district south of 60th Street. Discounts for low-income drivers, tax credits for low-income residents of the central business district, and disability exemptions for individuals who are unable to access public transportation will also be available.
While Hochul lowered congestion fees for the plan’s current iteration, they’re set to increase to $12 in 2028 and $15 in 2031.
If congestion pricing were delayed again or terminated, the MTA’s combined capital budget deficit would balloon to almost $50 billion. Albany could force the MTA to scale back its infrastructure plans, which would delay needed improvements. Ultimately, lawmakers will need to increase existing levies or create new ones to raise the tens of billions required to update a transit system that suffered years of neglect.
–With assistance from Bob Van Voris and Sri Taylor.
