New York City’s plan to impose congestion pricing in Midtown Manhattan has faced challenges since being halted by Governor Hochu in June. Supporters of congestion pricing have been calling for its reinstatement, with some even taking legal action. Governor Hochu has hinted at the possibility of implementing congestion pricing after lowering the rates. However, experts believe that restarting the program after reducing the rates may not be as straightforward as anticipated, and it could take several years to complete the process.
In June, Governor Hochu announced the suspension of congestion pricing on the eve of its implementation, citing the Metropolitan Transportation Authority’s (MTA) proposed basic fee of $15 as “too high for New Yorkers.” She pointed out that London began charging congestion pricing in 2003 at only £5. This suggests that Governor Hochu may consider lowering the rates before implementing congestion pricing. However, the $15 basic fee was determined by MTA officials after years of research and federal approval, aligning with the regulations outlined in the 2019 state legislation on congestion pricing, generating $1 billion in revenue for the MTA annually. Any modifications to the fee structure would likely require a complete restart of the process, making near-term implementation challenging.
Michael Gerrard, a professor at Columbia Law School and director of the Sabin Center for Climate Change Law, explained to Gothamist news site that if Governor Hochu decides to lower the basic rate to $9, the process would be relatively simple as the MTA had previously conducted environmental reviews based on the $9 rate. However, if the rate falls below $9, a new environmental review would be necessary. Michael Bennon, a researcher at Stanford’s Center on Democracy, Development, and the Rule of Law, also told Gothamist that New Jersey Governor Phil Murphy, who opposes congestion pricing in New York, has filed a lawsuit in federal court requesting a more comprehensive environmental review by the MTA. If there are significant changes to the fee structure, New Jersey would have grounds to demand a new environmental review before submission to the court. The MTA’s previous environmental review took over two years to receive approval from federal regulatory agencies, indicating that starting over could prolong the process even further.
On September 12, New York State Comptroller Thomas DiNapoli released a report stating that the suspension of congestion pricing has created a $15 billion funding gap for the MTA. If Governor Hochu intends to lower the basic fee for congestion pricing, it would require legislative changes by the state assembly to eliminate or reduce the provision generating $1 billion in annual revenue for the MTA. Even if these legislative changes are approved, the new fee structure would need to obtain federal approval again, introducing more uncertainties.
Furthermore, the reinstatement of congestion pricing in the near future faces additional uncertainties, as former President Trump has vowed to cancel congestion pricing within the “first week in office” if he returns to the White House on January 20 next year. Gerrard mentioned that in such a scenario, it could take several years before the congestion pricing plan has a chance to be reinstated.