NY congestion pricing pause already has consequences for infrastructure projects

New Yorkers are already facing the consequences of New York Gov. Kathy Hochul’s June 5 decision to halt the Manhattan congestion pricing program, which would have generated $15 billion for the New York Metropolitan Transportation Authority’s capital investment program.

MTA Construction and Development President Jamie Torres-Springer told reporters this week that the agency has stopped preliminary utility work on the Second Avenue subway extension to 125th Street. The MTA stands to lose a $3.4 billion federal grant for the project because it requires matching funds from the agency which were to come from the tolling plan. “We don’t want to lose that funding, although there are some real complexities right now,” MTA Chair and CEO Janno Lieber said at a June 10 press conference.

Lieber added that the MTA would have to shrink the agency’s 2020 to 2024 capital investment program. “This is not something we do lightly, but we simply cannot award contracts without dedicated funding in place,” he said. Instead, Lieber explained, “We have to prioritize the state of good repair work that assures the safety of our transit system.”

Also at that media briefing, MTA Chief Financial Officer Kevin Willens said that two credit ratings agencies, Moody’s and S&P, “Indicated that the lack of congestion pricing was credit negative for MTA. They haven’t changed our ratings or put us on a formal watch, but they commented on the negative credit implications.”

Transit systems have long faced a tension between state of good repair maintenance and expansion, Eric Goldwyn, program director at New York University’s Marron Institute of Urban Management and a professor of transportation and land use, told Smart Cities Dive in a June 11 interview. He explained that “the reason why so few [tranist systems] have expanded in the last 50 years [is] because all the money has been spent on state of good repair and maintenance.”

Feds give final go-ahead to congestion pricing plan

Despite the New York governor’s June 5 halt to the tolling program, on June 14 the Federal Highway Administration reaffirmed its final approval to the plan.

The FHWA’s reevaluation of the congestion pricing plan came in response to a May 23 request by officials from the MTA, New York State Department of Transportation and New York City Department of Transportation. The federal agency, which had conducted the environmental review, declared in a letter to those officials that it “finds that no additional environmental analysis is warranted.” 

In the FHWA’s 195-page reevaluation document, it noted that the tolls would not result in higher prices for most consumer goods, would only affect a small percentage of the total workforce and would generate economic benefits through travel-time savings and reliability. The federal approval does not require the project to go forward.

Kathryn Wylde, president and CEO of the Partnership for New York City, a business industry nonprofit, expressed her disappointment in the governor’s decision to indefinitely halt the tolling plan in a June 5 statement. The Partnership for New York City said in a June 6 statement that the organization opposed the governor’s plan to increase the Payroll Mobility Tax to cover the resulting gap in transit funding. The PMT is paid by employers. “Without congestion pricing tolls, the dependence on the PMT to fund all the MTA needs is unsustainable,” the organization said.

More reactions from business, environmental and transit advocates

A June 18 letter to Hochul signed by leaders of the Sierra Club, Environmental Defense Fund, Earthjustice, Evergreen Action and the League of Conservation Voters asked the governor to reconsider her decision and recommit to implementing the tolling program. “Your proposed indefinite delay poses a significant risk to achieving New York’s climate goals and the imperative to both reduce traffic congestion and ensure sustainable funding for more affordable and reliable transportation,” the letter states.

An opinion article by political columnist Charles Stile on NorthJersey.com said, “The money raised from the new fees would have been spent improving the subways and buses that many Garden State commuters hop on once they arrive in Manhattan,” countering the arguments of U.S. Rep. Josh Gottheimer, D-N.J., who has opposed the congestion pricing plan.