The implementation of the nation’s first congestion pricing plan has been pushed back several months in a move that MTA officials anticipate will cost the agency roughly $250 million in expected revenue.
Last week, the MTA released its February Financial Plan, which stated that revenue collection from congestion pricing is now expected to begin in the second quarter of 2024, meaning April 2024 would be the earliest that drivers are charged for driving into Manhattan’s Central Business District.
The agency had hoped to implement congestion pricing by the end of 2023, but ongoing delays in receiving federal approval have stymied that effort.
The most recent delay will be a costly one for the MTA, with the agency anticipating that the move will cost it roughly $250 million in anticipated congestion pricing revenue in 2024, according to the February Financial Plan.
Despite the MTA’s current financial woes, agency officials have downplayed the effects of the most recent delay, claiming the money is needed, but not immediately.
“We need that money, but to your question, from a cash-flow basis we don’t need the money tomorrow. And so far, we have been able to fund and advance all the projects that were scheduled to be advanced in our capital program. At some point we do need that congestion pricing money,” MTA CEO and Chair Janno Lieber said during a Thursday press conference.
The latest delay comes as the MTA continues to await federal sign-off on the controversial program.
In August, the MTA released the environmental assessment for New York City’s proposed congestion pricing program, giving drivers an in-depth look at how much they could be charged to drive into Manhattan’s Central Business District (CBD).
As part of the $175 billion state budget approved on April 1, 2019, the MTA’s Triborough Bridge and Tunnel Authority (TBTA) has been authorized to establish the Central District Business Tolling Program (CBDTP), which will charge travelers a variable fee for driving into Manhattan’s Central Business District, defined as any area south of 61st Street.
Congestion pricing refers to the use of electronic tolling to charge vehicles for entering certain areas during peak commuting hours, ideally resulting in reduced traffic congestion and increased revenue for transit projects.
Officials from both New York and New Jersey have been pressing the federal government to require a longer, more thorough environmental impact statement to better understand the potential effects of implementation.
Thus far, the federal government has only required the MTA to complete an abbreviated environmental assessment, which is the quicker of the two possible environmental review processes.
Now that the six-week public comment period for the environmental assessment has been completed, the Federal Highway Administration (FHWA) is reviewing public feedback and will either issue a finding of no significant impact (FONSI), allowing the program to proceed, or a request for an environmental impact statement, which will require additional study.
However, if the federal government requests an environmental impact statement, something elected officials have been pushing for, the project would need to be studied more thoroughly, likely delaying implementation past even the updated timeline of the second quarter of 2024.
Rep. Nicole Malliotakis (R-Staten Island/South Brooklyn), who has been among the most outspoken critics of the proposed program, recently spoke with FHWA Administrator Shailen Bhatt to reiterate her concerns about congestion pricing and the need for additional study.
“It’s important for the Federal Highway Administrator to hear the concerns that we have in regard to the lack of due diligence by the state and the MTA in evaluating the economic and environmental impact that this first-in-the-nation program would have,” Malliotakis said.
“I’m still hopeful that the FHWA will require the MTA to conduct an environmental impact statement,” she added. “We shared our thoughts that this was moving way too fast and that the MTA has not done its due diligence and we felt that the federal government could open itself up to lawsuits should they not require a full and thorough environmental impact statement.”
The congresswoman noted that the environmental assessment showed that implementation of the program could cause increased air pollution on Staten Island and in the Bronx, something she said she believes must be studied more thoroughly through an enhanced review process.
“The EA showed that pollution would increase in the outer boroughs, in the areas surrounding the congestion pricing zone,” she said. “Without having a full and thorough EIS, it leaves a lot of questions as to what the true impact would be.”
The environmental assessment outlined seven different tolling scenarios, with higher tolls rates, up to $23 during peak hours, in the scenarios that offer additional credits, caps and exemptions to certain vehicles.
Under all the scenarios described below, personal cars, motorcycles and commercial vans would be capped at one CBD toll per day, though other vehicles may be charged multiple times.
None of the scenarios outlined would provide an additional credit for drivers who cross the Verrazzano-Narrows Bridge before moving into the city, something the borough’s elected officials have pushed for since the program was first proposed.
In recent months, local officials have been pushing for the state to allow residents to vote on whether the potential program is implemented.
In November, Councilman Joseph Borelli (R-South Shore), Councilman David Carr (R-Mid-Island) and Malliotakis gathered on the steps of City Hall to ask the governor to support a statewide referendum that would allow New Yorkers to vote on the potential program before it could be implemented.
“Elected officials and dozens of organizations, including those representing taxi and livery drivers and trade and civic associations, as well as thousands of private citizens, have voiced their strong opposition to the Central Business District tolling plan,” the group wrote in a letter to Hochul.
“Among their concerns are the disproportionate harm this plan will have on working- and middle-class New Yorkers; the negative environmental and financial impacts of significantly increased traffic in outerborough communities; and the likely increase of the costs of goods and services to offset the exorbitant tolls,” the letter continued.
In December, Staten Island’s three city legislators introduced a City Council resolution calling for state lawmakers to put the congestion pricing plan through the state ballot process.
“Our plan is nothing more than a horrid scheme to charge motorists a new $5,000 annual fee, despite the MTA’s own study suggesting our benefits would be negligible,” Borelli said. “Now that the study is in print and accessible to the public, the governor must put it on the ballot and let voters decide if it’s worth it.”
Proponents also note it will improve public transit, an essential part of New York life. About 75% of trips downtown are via public transit.
But public-transit ridership is 25% to 30% lower compared to pre-pandemic levels, according to the MTA. The MTA says congestion fees will generate a critical source of revenue to fund $15 billion in future investments to modernize the city’s 100-year-old public transit system.
The improvements, like new subway cars and electric signals, are crucial to draw new riders and improve speed and accessibility — especially for low-income and minority residents, who are least likely to own cars, say plan advocates.
Improving public transportation is also key to New York City’s post-pandemic economic recovery: If commutes to work are too unreliable, people are less likely to visit the office and shop at stores around their workplaces. Congestion charge advocates hope the program will create more space for amenities like wider sidewalks, bike lanes, plazas, benches, trees and public bathrooms.