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New York City will “indefinitely pause” a congestion pricing plan that was years in the making, the state’s governor Kathy Hochul said on Wednesday, casting uncertainty over billions of dollars in expected funding for an ailing public transit system.
Hochul, a Democrat, cited New York City’s slow recovery from the Covid pandemic and the high costs weighing on ordinary New Yorkers as she sidelined what had been one of the city’s biggest initiatives in years.
“After careful consideration, I have come to the difficult decision that implementing the planned congestion pricing system risks too many unintended consequences for New Yorkers at this time,” Hochul said, noting that she had asked the Metropolitan Transportation Authority, which operates the city’s public transit system, to delay the plan “indefinitely”.
The announcement prompted fury from politicians who had long fought for the policy and were anticipating its implementation on June 30. Among them was Representative Jerrold Nadler, the Manhattan Democrat who is the dean of the state’s congressional delegation.
“After years of delay, we need congestion pricing now more than ever to reduce paralysing vehicle traffic,” Nadler said in a statement, adding that he was “disappointed”.
Modelled on similar schemes in London and Stockholm, New York’s congestion pricing plan was agreed between then-governor Andrew Cuomo and the state legislature in 2019, more than a decade after it was first floated by the mayoral administration of Michael Bloomberg. It called for the installation of electronic tolls to charge drivers about $15 to enter certain areas of Manhattan below 60th Street.
The policy was supposed to reduce traffic and improve air quality while raising an estimated $15bn over a four-year period for the MTA. The New York City subway has struggled to recover its ridership since the pandemic, adding to its chronic financial challenges.
The plan immediately drew sharp protests and legal challenges from neighbouring New Jersey, where Governor Phil Murphy, also a Democrat, complained that it was an unfair tax on residents commuting into New York City. Those who drive already pay about $15 to enter Manhattan by bridge or tunnel.
Another factor in Hochul’s decision may have been congestion pricing’s unpopularity among those in Westchester County and other regions outside the city, which have become pivotal battlegrounds for Democrats as they try to regain control of Congress.
The plan’s backers sought to lessen opposition by handing out a number of exemptions to ease the burden on certain commuters. But the policy became something of a lightning rod, with former president Donald Trump declaring that he would cancel it immediately if re-elected.
Its precarity was foreshadowed in March when Cuomo, who was instrumental in its adoption, publicly called for its delay.
“Many things have changed since 2019 and while it is the right public policy, we must seriously consider if now is the right time to enact it,” the former governor wrote in The New York Post, noting that many workers were no longer required to come into Manhattan. “What impact will an additional $15 entry surcharge have on New York City’s recovery in this moment,” he asked.
With the plan now on hold, the MTA will be forced to find new sources of funding or possibly be forced to cut services. Hochul is reportedly considering an increase to payroll taxes as one solution.
In a statement, Kathryn Wylde, president of the Partnership for New York City, an employers’ group, said the governor’s reluctance to implement congestion pricing was “understandable”. Still, Wylde called the decision “disappointing” and expressed the hope that the delay would be temporary.
