New York City started collecting congestion fees for vehicles entering Manhattan south of 60th Street starting on January 5th. By January 31st, the Metropolitan Transportation Authority (MTA) had received $48.6 million in revenue in the first month of implementation.
The congestion fee policy charges most drivers a $9 toll. According to data provided by the MTA to Bloomberg, around 85% of the congestion fees come from small vehicles, with the rest coming from commercial trucks. Most drivers use the E-ZPass electronic toll system, which deducts the toll directly from their accounts.
Of the total revenue, MTA deducted $9.1 million in operating expenses, resulting in a net income of $37.5 million. An additional $2 million was allocated for project funds to mitigate the impact of the fee zone on the surrounding area.
Jai Patel, MTA’s Deputy Chief Financial Officer, stated that as of January 31st, the fee program is expected to generate nearly $500 million annually, averaging around $40 million per month.
Since the implementation of the congestion fee program, traffic flow in the Manhattan central business district has significantly decreased. According to MTA data, from the start of the program until February 17th, the number of vehicles south of 60th Street decreased by 2.6 million, a 10% decrease, resulting in faster vehicle speeds on Manhattan streets.
Despite the congestion fee program’s financial performance meeting expectations, its future remains uncertain. United States Transportation Secretary Sean Duffy sent a letter to New York Governor Kathy Hochul last Wednesday, stating that the Federal Highway Administration will revoke the authorization for MTA to collect congestion fees.
MTA immediately filed a lawsuit in an attempt to prevent the federal government from halting the program. Last Friday, Hochul met with Trump at the White House, presenting a 22-page briefing and manual to explain the program’s effectiveness in alleviating traffic congestion. However, she admitted that she did not succeed in convincing Trump.
In addition, some Republican senators in New York are planning to request the complete abolition of the program and audit MTA.
MTA plans to issue $15 billion in infrastructure upgrade bonds using the revenue from the congestion fees, aiming to improve the subway signaling system and extend the Second Avenue subway to Harlem.
MTA Chief Financial Officer Kevin Willens stated that the first month’s revenue of the program shows accurate financial projections, enhancing their confidence in issuing long-term bonds in the future.
Furthermore, MTA data shows that there was an increase in paying passengers on subways and commuter railroads in January, exceeding the budget by $11 million in fare revenue. However, it is currently unclear whether this growth is entirely due to people switching to public transportation or the effectiveness of MTA’s recent efforts to reduce fare evasion.
Meanwhile, revenue from MTA’s bridges and tunnels tolls slightly decreased in January, by $1.6 million, a 0.8% decrease.