How Kathy Hochul's Congestion Pricing Delay Hurts Working-Class New Yorkers (And Might Be Illegal)

"This just seems like the worst of both worlds. Bad policy and bad politics."

By

Jordan Zakarin

and Paul Blest

Gov. Kathy Hochul’s abrupt decision this month to delay congestion pricing for cars driving south of 60th Street in Manhattan was met with bewilderment and outrage from lawmakers, policy experts, and — above all else — New Yorkers who rely on a public transit system sorely in need of upgrades. 

Hochul had spent the last year defending congestion pricing as essential for both reducing gridlock in New York (which in turn brings environmental and quality-of-life benefits) and funding the beleaguered Metropolitan Transit Authority (MTA), the city’s public transit system. She said her decision to “direct the MTA to indefinitely pause the program” was based on not wanting to “create another obstacle to continued recovery," arguing that the $15 charge during peak traffic hours “can break the budget of a working- or middle-class household.” 

In one particularly widely-mocked claim, Hochul said that owners of diners and hardware stores were “deathly afraid that they’ll lose their customers who may come in from places like New Jersey” — as if there’s a shortage of diners in north Jersey. Despite Hochul’s insistence, the available evidence suggests that the overwhelming majority of working-class people impacted by congestion pricing stood to benefit from it.

“This was simply pandering, and pandering in the most transparently silly way, by saying that working-class people would be hurt,” Roderick Hills, a professor at New York University who focuses on the division of powers between governments, told More Perfect Union. “The Federal Highway Administration has a white paper on who pays tolls and who benefits from subways, and only about 2 percent of the commuters who come into New York City are drivers.”

Since then, the MTA’s plan for signal upgrades, accessibility improvements, and service expansions that would have been made possible with the funding has been put on ice. And in addition to throwing the city’s transit system into chaos, it’s unclear whether Hochul even has the legal authority to make the decision she did. 

Here’s what you need to know. 

What is congestion pricing? 

Congestion pricing is a toll, which instead of being charged to all drivers crossing a bridge or entering a tunnel, is targeted toward people entering high-traffic areas during peak hours. In New York’s congestion pricing scheme, which was slated to go into effect at the end of this month, drivers would be charged $15 to enter Manhattan south of 60th St between 5 am and 9 pm on weekdays and 9 am and 9 pm on weekends. The revenue would pay for long-needed upgrades to the city’s public transportation system — $15 billion worth of the MTA’s $51.5 billion capital plan, which includes upgrading subway stations and improving accessibility, new buses and rail cars, and modernizing signals.

The primary reason for congestion pricing is to reduce congestion, which has had real, tangible impacts on quality of life, the environment, and residents’ health. New York City sees around 250 road crash fatalities every year, about three times the rate of Stockholm, according to Streetsblog. In South Bronx neighborhoods like Mott Haven and Port Morris, the effect of congestion shows not only in the number of traffic-related injuries but also the high rates of asthma. 

New York City mayoral administrations have been seeking to tackle the problem of congestion for decades, Hills pointed out. "It's actually been worked on since the [John] Lindsay administration, we have been studying and debating tolls on the East River bridges and tunnels," Hills said, referring to the two-term mayor who left office in 1973. "Bloomberg had proposals...this has been going on forever."

In 2019, the New York State legislature finally authorized the city to enact a congestion pricing program, which needed the approval of the Federal Highway Administration (FHWA) as well. The FHWA then released a 1500-page environmental assessment last year that found there would be “no significant [negative] impact” on the environment as a result of the toll; on Friday, the FHWA reaffirmed that position, and even revised its numbers to show that congestion pricing would decrease traffic in lower Manhattan by 17 percent and improve air quality. (A federal court last week also flatly rejected a lawsuit to kill congestion pricing, filed before Hochul’s decision, which was based on the argument that the federal environmental review that lasted four years and totaled more than 45,000 pages wasn’t sufficiently rigorous.) 

This would be the first time a major U.S. city adopted congestion pricing, but it’s been used by other notable cities like Singapore, London, Milan, and Stockholm — where it’s worked to reduce traffic and vehicle emissions. And though public transportation in the U.S. is notoriously bad compared to other developed nations and it’s unlikely that congestion pricing would work everywhere without enormous investments in public transit, New York City is a unique case; because of its reliability, not to mention existing traffic congestion issues, public transportation is one of the central highways for workers in, out, and across the city. 

According to a 2022 study by the Community Service Society of New York, more than 60 percent of low-income New York residents who live outside of Manhattan get to work using public transportation; the same survey found that just 2 percent (or 5,000 people) of working-class people living in the outer-boroughs drive to work in Manhattan and would thus be charged the toll. 

The impact of canceling congestion pricing on working people

While Gov. Hochul argued that the plan would have imposed too high a cost on working-class New Yorkers, she would have likely discovered otherwise had she spoken to anybody outside of a few midtown diners.

In Stockholm, congestion pricing reduced childhood asthma by 50 percent. Every city is different, and New York’s massive size and highway system left some people concerned that traffic would increase outside of Manhattan, but experts expected that at least three of the city’s five boroughs would benefit from lower emissions and the diseases that accompany air pollution. The boroughs that wouldn’t have seen a direct reduction at the outset were due to be compensated with other environmental benefits that would have mitigated pollutants in other ways.

The state assembly districts where the toll was due to take effect have exceedingly high rates of PM2.5s — the most dangerous chemical in urban air pollution — that reach up to 60 percent above the upper limit of what’s recommended by the World Health Organization. Not only would congestion pricing have reduced the emission levels, it would have provided more space for trees, as these districts have 24 percent less tree canopy cover than the average district. As the earth continues to boil, shaded public spaces are a vital resource for working families.

The plan was also meant to raise critical resources for New York’s long-underfunded public transportation system. Congestion pricing would have raised around $1 billion a year for the MTA’s capital budget, and much of that income was already earmarked for critical infrastructure maintenance and improvements. In 2019, just over 71 percent of New Yorkers commuted to work via public transportation, and by December 2023, there were about four million New Yorkers who commuted daily via public transit.

According to an analysis by the Community Service Society, just four percent of all outer-borough New Yorkers drive into Manhattan for work. Further, just two percent of low-income outer-borough residents would have been required to pay the congestion pricing toll with any regularity — that’s just 5000 people total. And for every low-income outer-borough New Yorker who had to pay that tax, more than 50 of them would have benefited from the improvements funded by the toll.

The CSS survey also found that more than half of all working poor and near-working poor households in the outer boroughs don’t even have a car, while more than three-quarters of high-income households do. “[The numbers] of those who are in poverty, who need to drive, are extremely low, extremely low,” said Rachael Fauss, a senior policy director at the government watchdog group Reinvent Albany. “The vast majority of people who drive are wealthier. So the affordability argument is bogus.”

Improvements made to the nation’s largest and most complicated public transportation system tend to have a ripple effect, but many of the investments were earmarked for working-class neighborhoods in particular. The MTA wanted to increase accessibility at stations in the Bronx, south Brooklyn, deep into Queens, and upper Manhattan, including East Harlem. The agency also sought to upgrade bus depots in working-class neighborhoods and give them first access to hybrid and electric buses.

According to the MTA, the capital plan supported about 57,000 jobs per year in the state, and without congestion pricing, more than 23,000 of them are in danger of evaporating. Those jobs were projected to pay an average of $102,000 per year. Nearly a quarter of those jobs would have been created outside of NYC, in fields such as manufacturing and engineering.

Instead of alleviating traffic, clearing the air, improving commutes, and creating tens of thousands of jobs per year, Hochul’s decision will leave in place a status quo that continues to get worse. According to the Riders Alliance, a nonprofit organization focused on public transit, Manhattan street congestion costs individuals around $20 billion in lost time per year, a toll of about $1200 per commuter.

Is this legal?

The legality of Hochul’s decision has been called into question, given the MTA’s independence under state law and the fact that the process has been moving along since well before Hochul even became governor. 

“The fundamental point remains that congestion pricing is the law,” Fauss said. “In New York State, the governor is refusing to follow the law. Whether or not the federal government approves it or not, the governor is refusing to follow the law.” 

Hills told More Perfect Union that there are multiple legal grounds on which Hochul’s decision can be challenged — that Hochul doesn’t have the authority to make the decision unilaterally, or that she didn’t sufficiently explain her reasoning while striking down the congestion pricing plan.

The first, Hills said, is to "simply say, 'Look, you don't have the authority to hold this program up simply by withholding your signature, because the people who speak for New York are MTA and the city of New York.”

“Your signature is merely a formality. The feds might require it, but if they do, you're required to put it down there,” Hills told MPU. “You have no discretion because you cannot use a federal bureaucratic formality to leverage yourself into power that the state hasn't given.”

The second argument, he said, would rely on a mechanism New Yorkers have to sue state agencies called Article 78. 

"When any state agency does anything, they have to give a reason,” Hills said. “And if their reason is unintelligible, incoherent, or contradicts what they said earlier, then state courts are entitled to overturn the decision that was accompanied by a lousy reason.”

"She's allowed to change her mind just like anybody else, but she's got to give a good enough reason to explain the change,” he added. “And it cannot be that she suddenly discovered that commuters are gonna have to pay fifteen bucks. That’s like saying, ‘I discovered stoplights make people stop.’ It’s absurd.”

Fauss said that a number of groups could have standing in a potential lawsuit, including subway riders and disability advocates; the MTA settled a lawsuit last year by pledging to make 95 percent of subway stations ADA-compliant by 2055, a target that could now be abandoned due to the hole in funding caused by Hochul’s congestion pricing move. 

“There will be lawsuits,” Fauss said. “It's just a question of where, and it's a question of when and who the plaintiffs will be.”

“We still have congestion pricing on the books,” she added. “But the MTA has a $15 billion hole because the governor is refusing to implement the law.” 

So now what?

Hochul has insisted that she is committed to finding alternative revenue streams to fill that $15 billion hole, and suggested that she could call the legislature back for a special session to address the issue as soon as next month. Finding a workable solution may prove elusive, however, given the political and ideological differences at play. 

Though she suspended congestion pricing out of alleged concern for working-class New Yorkers, Hochul is said to have initially floated an increase to the regressive payroll tax to plug the gap. Taxing workers and businesses across the state was a nonstarter for lawmakers, especially in an election year, while Hochul has long opposed increasing taxes on the wealthy to pay for vital services in the state with the highest income inequality index in the nation.

With lawmakers continuing to press Hochul to reverse her decision, there has been little appetite among legislators to offer alternatives. As a result, some of New York’s heavy hitters have sought to lend their problem-solving skills to the governor.

Last Tuesday, Sen. Kirsten Gillibrand suggested that the state look into a 20-year plan to create “hubs outside of the city where people can leave their cars and then fast rail or light rail into the city.” Better known as parking lots at train stations, these hubs already exist across New York and New Jersey, and would be even more highly utilized if public transportation were made faster and more accessible.

Hochul is said to have made her decision without consulting MTA chair Janno Lieber, who said nearly a month before the announcement that there was no Plan B and maintained that position during a tense press conference afterwards. 

Now, without congestion pricing, any hope of alleviating traffic and improving public transportation in New York is stuck at an impasse.