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Congestion Pricing is Slowly Coming to New York City

London, Singapore, and Stockholm have all managed to do something that New York City has been unable to do; enact and implement congestion pricing in its central business district. The concept is simple: Charge a toll on vehicles south of 60th street in Manhattan. The tolls would then be spent to make mass transit more efficient and effective. Two years ago, the state of New York passed a law requiring the fee to be charged. After much delay, recently, public hearings began to help shape the parameters of the program’s operational design.

Mike Bloomberg tried to enact congestion pricing back in 2007 as part of his landmark sustainability plan. It fell victim to Albany politics fueled by outer borough opposition to a toll that very few outer borough commuters would pay. Last week, New Jersey Governor Phil Murphy, coincidentally engaged in a nasty re-election campaign, threatened to use the “nuclear option” of holding up business in the bi-state Port Authority if the plan is allowed to go forward. It reminds me of the scene in the old Mel Brooks film Blazing Saddles where one character points a gun at his own head and says: “Don’t anyone move, or I’ll shoot.” Disrupting the Port Authority will hurt New Jersey at least as much as it harms New York, or to use the unfortunate nuclear analogy, the fallout won’t be limited to the east side of the Hudson River. And in case he hasn’t read the data- more people from New Jersey commute to New York by mass transit than by personal transit. In a 2017 study of the 346,000 commuters from New Jersey to Manhattan, fewer than 60,000 traveled by car. Presumably, even fewer commute to lower Manhattan.

While pandering politicians like Murphy will continue to make noise throughout the region, the hearing processes now underway are seeking to identify the impact of the fee on lower-income New Yorkers and communities of color. As the fee is implemented, we will see inequities and unanticipated impacts that will need to be addressed. For example, will commuters seek to evade the fee by parking north of the congestion zone? Many health care facilities are in the congestion zone. Will exemptions be required for elderly or less mobile people who cannot always use mass transit to obtain medical care? In his excellent New York Times piece last week, Michael Gold reported that:

“Under the congestion pricing plan approved by the state legislature, vehicles entering the tolling zone would be charged once per day. Toll prices have not been set; those will be recommended later by a six-person board. But Allison C. de Cerreño, the M.T.A.’s deputy chief operating officer, has said at public meetings that rates were expected to range from $9 to $23 for passenger vehicles using the E-ZPass toll system, with possible discounts overnight or during off-peak hours. If there are more exemptions, officials said, the base rate would likely be higher. Currently, emergency vehicles and those transporting people with disabilities are exempt from fees, as are vehicles that travel on the F.D.R. Drive or West Side Highway but do not exit onto city streets. Residents who live in the tolling zone and earn less than $60,000 would also qualify for a tax credit. But at the hearings many argued that those exemptions and credits did not go far enough.”  

The goal of the policy is to price a free good that is being over-used: the street surfaces of lower Manhattan. Assuming the Phil Murphys of the world leave the policy alone, if the fee is finally made real, it will have taken a decade and a half from concept to reality. The benefits of the fee are that it will reduce traffic and generate needed resources for mass transit. Better mass transit will reduce the generation of greenhouse gasses- even when we’ve moved to personal electric vehicles. The amount of energy per person used to move a subway car is far lower than the power needed to move any car. Subway traffic and even bus traffic takes up less street space than motor vehicles leaving more street space for pedestrians and bicycles.

Traffic congestion not only pollutes the air; it also costs money. People stuck in traffic often are unable to work, and the cost of shipping commercial goods goes up as trucks take more time to deliver their cargoes. Mass transit requires new forms of revenue to keep its price low to attract riders. Congestion pricing can be an important source of revenue.

The delays in implementing the state law have been blamed on COVID-19 and political paralysis at the federal, state and city level. The Trump Administration ignored New York State’s request for permission to toll back in 2019, while the Biden Administration moved forward in March 2021, requiring an environmental assessment prior to implementation. That assessment is now underway.  We now have a new president and an even newer governor and will soon have a new mayor and the refreshed political dynamic might move this policy from design to reality. In September, Erin Durkin, Anna Gronewold and Deanna Garcia reported in Politico that:

“There was some trepidation among backers of congestion pricing when Kathy Hochul, as she prepared to replace Andrew Cuomo as governor, took a rather equivocal stance on the scheme to charge drivers entering the heart of Manhattan. The governor’s position is murky no longer: Hochul offered a full-throated embrace of the policy when asked about it on Wednesday. “I have supported, I do support and I will support — no question, my support for congestion pricing,” she said. “And I've already asked the question, how do we reduce the timeframe?”

Shortly after winning the Democratic primary for Mayor, Brooklyn Borough President Eric Adams declared his support for congestion pricing. While he expressed a desire to protect low-income New Yorkers needing to drive into Manhattan from fees, he expressed strong support for both the fee and the use of fees to improve mass transit. The impact of congestion pricing on low-income New Yorkers was studied before the pandemic by the Community Service Society of New York:

“ CSS decided to examine the potential impacts of congestion pricing on the working poor. Our analysis found that just four percent of the city’s outer-borough working residents commute to jobs in Manhattan by vehicle and could be subject to a congestion fee. This compares with 56 percent of outer-borough residents who use mass transit to commute to work in Manhattan, the other boroughs or outside the city. Another 29 percent drive to other destinations besides Manhattan for work, 11 percent use other modes of travel to work outside Manhattan, including biking, walking, taking the ferry or working from home. Just one percent walk, bike or take the ferry into Manhattan for work. Of the four percent who drive to jobs in Manhattan, the overwhelming majority have moderate and higher incomes. CSS also found that only two percent of the city’s outer-borough working poor could potentially pay a congestion fee as part of their daily commute. This compares with 58 percent who rely on public transit and would theoretically benefit from a congestion pricing plan that raises money for both improved transit services and fare discounts.”

In other words, as the political rhetoric about congestion pricing heats up, let’s remember the point that CSS is making here: Congestion pricing in New York will redistribute wealth from people with higher means to the working poor. The charge will be paid by wealthier commuters and fund improvements in mass transit used by the working poor. The congestion fee will be a major source of funds to the MTA’s capital plan. As Dan Zukowski reported in Smart Cities Dive:

“Once underway, New York's Central Business District Tolling Program is expected to pay for about 30% of the Metropolitan Transportation Authority’s ambitious $51 billion capital investment plan, as revenue would be used to secure $15 billion in bonds towards transit projects…”

Congestion pricing is an example of a well-designed policy that reduces traffic (a benefit to folks in cars) while raising desperately needed capital funding for mass transit. Coupled with the federal infrastructure funds that I still believe are coming, it could signal a major enhancement of New York City’s decaying subway and bus system. Mass transit is the circulatory system of the organic entity we call the City of New York. Its restoration is long overdue and congestion pricing can help put the system on the long-term road to recovery.

This article was originally published in State of the Planet.

The views expressed are those of the author and do not necessarily represent the views of any other person or entity.