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Whatever Happened to Congestion Pricing?

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eye on the news

Whatever Happened to Congestion Pricing?

New York’s long-planned traffic reform remains a paper tiger. June 23, 2022
New York
Economy, finance, and budgets

Whatever happened to congestion pricing in New York? In April 2019—more than three eventful years ago—then-governor Andrew M. Cuomo signed into state law a “first of its kind in the nation” plan to charge car and truck drivers a toll to enter Manhattan below 60th Street, calling it “the smartest idea . . . for urban development.” The New York Times confidently noted that “drivers will have to pay to enter the heart of Manhattan starting in 2021.” That year came and went. Earlier this month, Governor Kathy Hochul said in a gubernatorial debate that congestion pricing won’t happen for at least another year, “under any circumstances. Now is not the time.” State officials, all Democrats, blame the federal government, but a deeper obstacle exists: the Democrats just don’t want to do it.

The economic theory behind congestion pricing is not complicated. Manhattan street space is scarce, and cars are the most inefficient way to travel within the borough’s business and entertainment core. Charge people to use the space and drivers will either change their behavior or, if they can’t or won’t, they will pay for the congestion they create. This maxim was borne out by a recent Siena College poll, which found that 42 percent of New Yorkers, when faced with such a fee, would drive into Manhattan less, with 64 percent using mass transit more. One-third of people polled said that they’d just go ahead and pay the fee, which would generate at least $1 billion a year for mass transit.

But the politics of congestion pricing have proved impossible for five decades. Since the early 1970s, mayors from both parties—John Lindsay, Ed Koch, and Michael Bloomberg—have pushed for some form of congestion pricing, including, in the earliest proposals, tolls over the free East River bridges from Brooklyn into Manhattan. Governors supporting the idea have included Republican Nelson Rockefeller and Democrats Eliot Spitzer, David Paterson, and Cuomo.

Yet none was able to turn the concept into law until Cuomo. How the then-governor achieved this feat represented a microcosm of Cuomo’s political skills. In 2017, the subways began to deteriorate, in part because Cuomo had diverted maintenance resources, the year before, to open the Second Avenue Subway’s first three stops on the schedule he had promised. The Riders Alliance and other transit-advocacy groups successfully blamed the governor, creating the Twitter hashtag #cuomosmta to pin any and all subway delays and disruptions during that year’s “summer of hell” on him. At a time when progressive activists were on the electoral ascent, actor Cynthia Nixon launched a 2018 primary challenge to Cuomo on the issue, saying, “he’s the one who broke the subway. I’m the one who’s going to fix it.”

Cuomo turned this liability into an asset. During the 2017 summer of hell, the then-governor called congestion pricing an idea “whose time has come.” In January 2018, he teased congestion pricing in his State of the State address. That spring, he convinced the legislature to enact a $2.50–$2.75 surcharge on for-hire vehicle rides in core Manhattan—a preview of the larger plan that had the added benefit of not alienating most drivers in that election year.

A year later, in the spring of 2019, even as subway service improved, the legislature voted for a toll on all drivers. Lawmakers voted for the proposal for several reasons. First, Cuomo put congestion pricing into the state budget, along with other non-budget items, such as the elimination of cash bail for most crimes. Lawmakers who cared about one had to vote for the other. Second, Cuomo implied that were congestion pricing to fail, he would publicly blame individual lawmakers for future transit-fare increases.

Finally, congestion-pricing supporters had, by this point, spent years knocking down strawman arguments against the program, giving lawmakers some cover on the merits. No, congestion pricing wouldn’t hurt poor people, as almost no poor people drive into core Manhattan regularly. No, it wouldn’t hurt the disabled, as people with disability license plates would be exempt, and some of the money would go to new elevators in the transit system. Advocates had also spent years devising ways to win the support of outer-borough and suburban lawmakers by promising specific new funding for bus routes and for new commuter-rail stops in areas not served well by transit, including southeastern Queens and the east Bronx, respectively.

Most important, though, was the date. Cuomo wrote the law so that the MTA, which would run the program, could not begin congestion pricing anytime soon; officials at the transit authority could not even publicly suggest the proposed toll rate. “The implementation day will not be before December 31, 2020,” the governor’s office noted. Most observers, including the Times, read this as a rough deadline: that is, the state now had to enact congestion pricing sometime in 2021.

Actually, it was the opposite of a deadline. Cuomo, through the MTA, now had full freedom from the legislature to decide not only when to implement congestion pricing, beginning in 2021, but if. He was in the perfect political position: he had turned the transit-advocacy world from his worst enemy into his best friend, but he alone would decide on the right moment, if any, to risk alienating voters from swing-district suburbs on Long Island and in Westchester by actually launching the program. Note that suburban swing voters don’t actually have to drive into Manhattan regularly to resent such tolls; they just have to desire, theoretically, to drive into Manhattan for free.

It’s impossible to know whether Cuomo, had he not resigned in scandal last year, would have started imposing the toll. In February 2020, even before Covid hit the city and state hard, he began blaming then-president Donald Trump for predicted delays, saying the federal government was holding up the environmental-review process. But in the long term, time would not have been on the governor’s side in proffering excuse after excuse for delays. Eventually, in a future transit crisis, Cuomo alone would have become the governor who had promised something—congestion pricing to save transit—and failed to deliver it.

Kathy Hochul faces no such pressure. She had never asked the public to identify her with congestion pricing, as Cuomo did. But like Cuomo, she is happy to blame the sitting president. And the excuse proffered is largely the same: the federal government’s baroque environmental requirements.

There’s a superficial paper trail behind this alibi. Even after determining that the MTA could conduct a short-form environmental review rather than the long one, the Federal Highway Administration, earlier this year, sent 430 technical questions and comments to the MTA to answer, including, apparently, asking the authority to “model the impacts on traffic all the way down to close to the suburbs of Philadelphia.”

But the excuse is dubious. We have no real idea whether the federal questions are that complex. As the feds have stayed silent and the questions are not publicly available, we must take the MTA’s word for it. Either way, the queries should not take months to answer. Everybody should be on the same side. The federal Department of Transportation is peopled by former New York City transportation officials, including Bill de Blasio–era transportation commissioner Polly Trottenberg. The federal DOT secretary, Pete Buttigieg, is supposedly a progressive environmentalist. Trying to head off an environmental lawsuit by answering every conceivable question in advance, another alibi given, is a losing game. In such a hypothetical scenario, were a federal judge to find the environmental-review process deficient, the MTA could address the deficiencies then. It does not have to create the very delays it is purportedly trying to avoid.

Moreover, though Hochul blames the feds, part of the process remains under her control—and she hasn’t advanced it. The MTA, under her oversight, has never named the six-person review panel that would guide the state through the congestion-pricing process. That panel is charged with determining, for example, not just the range of fees to charge but also any broad exemptions other than for people with disabilities (such as for, say, public employees, who disproportionately drive to work in Manhattan, as they can use fake parking placards to park on the street for free). Nothing prevents the MTA from naming this board now.

The new strawman argument against moving more quickly is that the pandemic has changed everything. Hochul hinted at this concern recently in her debate comment, in saying that “now is not the time.” Why not? Though transit ridership has recovered to only 60 percent of normal, driving volume across the MTA’s tolled bridges and tunnels, including into Manhattan, has rebounded to near pre-Covid levels.

New York’s permanent state of political dysfunction prevents it from grappling with the concerns about congestion pricing that aren’t strawman arguments. Was it a good idea for Cuomo to put the state in charge of the program, rather than to put New York City in charge? After all, the city manages urban streets, and pays for their upkeep; city voters should also have an outsize say in how transit dollars are spent. Is there any evidence that the MTA can spend the money wisely—considering the high cost of construction in New York, as well as the inflationary labor contracts it will soon be under gubernatorial pressure to sign with its biggest labor union, the Transport Workers? What does New York’s transportation system and transit system even look like in five years, with such vastly changed post-Covid travel patterns, and how does congestion pricing fit into that future? Is congestion pricing’s goal to maximize revenue, or to keep Manhattan traffic below some stated target? Should the MTA, for example, couple the first few years’ worth of congestion-pricing charges on passenger-car drivers with an option to rebate the charge for a ride on commuter rail or on the subway? Should drivers get a fixed number of free trips into Manhattan per year, per license plate, to account for infrequent trips to see a Broadway play or visit a doctor? How is New York going to guard against the proliferation of fake or obscured license plates to evade tolls? We can’t ask or answer these advanced questions because we’re still at the pre-remedial level.

One more question: Who benefits from delay now? Hochul does. She doesn’t have to take the risk, in this fall’s election, of turning off suburban downstate voters. That peril is especially heightened as she faces two opponents—Tom Suozzi, in the Democratic primary, and Lee Zeldin, potentially in the general election—who favor delaying congestion pricing and cancelling it, respectively.

The broader Democratic Party also benefits from delay. Senate Majority Leader Charles Schumer holds massive clout in Washington over which infrastructure projects go forward, and on what schedule. He knows that the party’s majority in the House this November could hinge on a handful of seats. Does Schumer want to see Democrats lose the House because a few New Jersey voters—enough to matter in a close election—are upset about congestion pricing? This reasoning may sound paranoid, except that New Jersey Democrats can’t stop talking about how they’ll protect Jersey drivers from New York’s tolls.

Schumer must worry about gas prices, too, which have hit record highs. Democrats have shown no inclination to stick to their principles of discouraging gasoline consumption. Hochul, for instance, has rolled back a state gas tax, and President Biden is considering the same on the federal level. Schumer cannot want New York’s congestion-pricing program to be a talking point in a broader election-year narrative about how Democrats want to make things even more expensive for drivers by charging them to use the streets.

For now, New York’s transit advocates are saving most of their ire for Buttigieg. Mayor Pete may not be quite a Trumpian villain, but he’ll do. It’s unlikely, though, that being blamed for not imposing a new fee on driving amid record gas prices and nearly double-digit inflation is keeping the Transportation secretary up at night.

No future governor is going to champion what will be increasingly caricatured as Cuomo’s never-enacted, past-its-time folly. The alternative is just as bad: at some point, New York and its transit system face fiscal crises so serious that elected officials will have no choice but to levy a congestion-pricing toll with a goal of deriving maximum revenue—without careful deliberation about the best fee structure and how best to spend the money wisely. At that point, Washington will stop standing in the way since it is not inclined to help out otherwise, such as via a massive federal rescue package.

Unless state and national Democrats show leadership—including willingness to pay the political price to implement a sound long-term policy—New Yorkers may still be asking themselves in five years: Whatever happened to congestion pricing?

Photo by JOHANNES EISELE/AFP via Getty Images

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