Hochul says she will delay NYC congestion pricing

Citing concerns over the financial recovery of New York City, Gov. Kathy Hochul announced on Wednesday an “indefinite pause” of the city’s congestion pricing program, which was set to take effect in less than a month. But she did not immediately address how the state would replace the estimated $1 billion in annual revenue that the plan was meant to provide for the Metropolitan Transportation Authority. 

In a pre-recorded message, Hochul said that “circumstances have changed” since lawmakers first approved congestion pricing five years ago. “So after careful consideration, I have come to the difficult decision that implementing the plan congestion pricing system risks too many unintended consequences for New Yorkers at this time,” Hochul said. Although she reiterated her support for the goals of congestion pricing – reducing both pollution and city gridlock – she said that the city was still recovering financially from the pandemic. “We cannot afford to undercut this momentum, and I won't allow this delicate recovery to be jeopardized,” Hochul said.

After years of delays, the city’s congestion pricing program was meant to take effect on June 30. Drivers entering Manhattan’s commercial business district south of 60th St. would need to pay a $15 toll. The program was meant to provide the MTA with at least $1 billion annually for crucial repairs and improvements, revenue that the transit agency will now need to find elsewhere.

Hochul only hinted at how the state might fill the gap, saying that her administration has “set aside funding to backstop the MTA capital plan” in the event that it was delayed due to one of many lawsuits brought against the plan. And she said she is “currently exploring other funding sources.” A spokesperson for Hochul did not immediately respond to a request for comment about the set-aside funding, and it was not immediately clear how much money Hochul may be referring to. The state currently has about $20 billion in reserves that the governor could dip into. She recently used $500 million intended for reserves to bolster migrant aid to New York City.

The governor has also reportedly floated the prospect of increasing the MTA payroll tax on New York City businesses, which would require legislative approval. The payroll tax was most recently increased as part of last year’s state budget in order to fill an MTA budget gap.

Politics of congestion pricing

Hochul’s abrupt decision to delay the start of congestion pricing was reportedly driven by concern that the policy could hurt Democrats’ chances in November. The congestion pricing plan was deeply unpopular in the suburbs where Democrats are trying to win back or protect House seats. A spokesperson for House Minority Leader Hakeem Jeffries, who is leading Democrats’ efforts to take back the House, said that Jeffries has remained neutral on the issue of congestion pricing but supports Hochul’s decision to delay its implementation. “To the extent immediate implementation of congestion pricing is being reconsidered, Leader Jeffries supports a temporary pause of limited duration to better understand the financial impact on working class New Yorkers who have confronted a challenging inflationary environment as a result of the pandemic,” spokesperson Andy Eicher said.

John Samuelsen, the president of the Transport Workers Union and a member of the MTA board, cast doubt on the idea that Democrats will benefit electorally from Hochul’s decision. “The workers who were opposed to congestion pricing are going to be thankful, but they’re not going to say, ‘Oh, let’s credit Kathy Hochul with ending it and give her a vote,’” Samuelsen said. He has opposed the implementation of congestion pricing without massive service increases for the outer boroughs, charging it would burden blue collar workers. “Now, there's going to be repercussions at the ballot box and no congestion pricing,” Samuelson said. “So for those who hate it, it's a win-win.”

On Wednesday morning, New York City Mayor Eric Adams told reporters that he was concerned about the potential impact of congestion pricing on the city’s financial health, though he did not say whether he supported a delay. “We have to make sure that it's not a dual burden on everyday New Yorkers,” Adams said. “We have to make sure that it's not going to impact our recovery.” The mayor has largely distanced himself from the tolling plan, and he told lawmakers in February that would like to see changes to the program.

Criticism and praise for Hochul

Until very recently, Hochul was fully on board with the scheduled implementation of congestion pricing, and her about-face was panned by a wide variety of groups and individuals in the business, transportation and environmental spheres, as well as many elected officials in New York City. “There is no path to a replacement for congestion pricing that we see right now,” said Danny Pearlstein, policy and communications director for New York City Riders Alliance. Pearlstein said that MTA President Janno Lieber “has been emphatic about that through all the litigation – there is no Plan B, this is sound public policy.” Lieber did not return a direct request for comment on his thoughts, and a spokesperson for the MTA referred back to Hochul’s announcement when asked for comment. 

Julie Tighe, executive director of the League of Conservation voters said in a statement that she was “shocked and dismayed” by the governor’s decision. “We cannot drive our way out of the climate crisis – and we shouldn’t let a small number of drivers who refuse to take mass transit in the most transit-rich region of the country dictate transportation policy,” Tighe said. She was in attendance at a rally outside the governor’s Manhattan office on Wednesday to denounce the decision, along with transit advocates like Riders Alliance and elected officials including Brooklyn Borough President Antonio Reynoso and city Comptroller Brad Lander.

Kathryn Wylde, CEO of the pro-business group Partnership for New York City, called Hochul’s decision “disappointing.” “We hope that this pause will be temporary, providing an opportunity to ensure that the MTA capital plan will maximize improved transit services that will accommodate a shift from cars to public transit,” Wylde said. Carlo Scissura, president of the New York City Building Congress, said news of the delay was like “living in a bad episode of ‘The Twilight Zone.’” He said it would be “a devastating blow to commuters” and that “congestion pricing is our greatest opportunity to ‘fix the MTA.’”

Some Democratic critics of congestion pricing praised Hochul’s decision. “A delay is good, I’d love to see an elimination or a repeal, but certainly this is not the right time,” said Queens Assembly Member David Weprin, a frequent critic of the tolling scheme. He said he would support alternate revenue streams for the MTA, like the payroll tax and cracking down on fare evaders. “We've done significant revenue for the MTA over the last few years, and we could certainly, at any time, come back at a later date,” Weprin said, expressing a willingness to address the issue even after the scheduled legislative session ends in two days.

Hudson Valley Rep. Pat Ryan, who is facing a potentially tough reelection, took credit for Hochul’s reversal. “Since day one, I’ve fought alongside countless Hudson Valley families against this unfair, uninformed, and unacceptable congestion pricing plan,” Ryan said. “Today, I’m proud to say we’ve stopped congestion pricing in its tracks.”