Congestion Pricing Revived with 40% Discount, Hochul Announces

Governor Kathy Hochul has officially revived New York’s congestion pricing plan, introducing significant changes to the toll structure. Initially slated for implementation in mid-2024 but delayed, the revised plan reduces tolls by 40% and sets a new start date of January 2025.

Under the updated plan, the toll for most drivers entering Manhattan south of 60th Street will drop from $15 to $9. Other adjustments include reduced rates for small and large trucks, lower overnight tolls, and decreased surcharges for ride-hailing services like Uber and Lyft. Large truck tolls will be reduced to $21.60 from $36, while overnight car tolls will fall to $2.25. Taxi surcharges will drop to 75 cents, and ride-hailing surcharges will be reduced to $1.50.

Despite the reductions in the toll, the state expects the plan to generate sufficient funds to secure $15 billion in bonds for the Metropolitan Transportation Authority (MTA). These funds will be allocated to critical infrastructure projects, including extending the Second Avenue Subway, upgrading outdated subway signals, purchasing new railcars, and enhancing station accessibility with elevators and ramps.

“I believe no New Yorker should pay more than necessary to achieve these goals,” said Hochul, emphasizing that the adjusted toll structure balances the need for MTA funding with affordability for commuters.

Additional Transit Improvements

In addition to the toll adjustments, Hochul announced increased bus service frequency on 23 routes in the city’s outer boroughs, a measure not included in the original congestion pricing plan.

Federal Review and Approval

The revised toll structure is expected to bypass the need for a full environmental review, requiring only a re-evaluation by federal authorities and a subsequent 30-day public review. A vote by the MTA Board is anticipated next week, and if approved, the program will launch in early January 2025.

Political Resistance

The announcement comes amid political pushback, notably from former President Donald Trump, who has vowed to terminate congestion pricing if he returns to office. Trump labeled the tolls “the most regressive tax known to mankind,” claiming they would harm New York’s competitiveness and drive businesses away. MTA Chair Janno Lieber countered, noting that most Manhattan commuters rely on mass transit, which stands to benefit from the program’s investments.

New Jersey Governor Phil Murphy also reaffirmed his opposition, citing economic hardships and inflation as reasons to fight the plan in court. Lawsuits against congestion pricing have previously delayed its rollout, though most challenges have been dismissed.

Economic and Political Implications

The 40% reduction in tolls is expected to reduce annual revenue from $900 million to approximately $600 million. This decrease will likely extend the timeline for major MTA projects. Hochul’s administration argues that the reduced funds remain sufficient to meet the program’s financial obligations over an extended period.

Hochul reiterated that the decision to pause and revise congestion pricing earlier this year was based on economic considerations, not political motivations, despite speculation that the delay was tied to electoral strategies in suburban districts.

“If you take the election out of it, this is a very normal sequence of events,” Hochul stated, asserting that the pause allowed her administration to refine the plan and address concerns about affordability and inflation.

Moving Forward

The revival of the congestion pricing program marks a significant milestone for New York’s transportation infrastructure. As implementation approaches, Hochul aims to demonstrate that the program can reduce congestion, fund critical transit upgrades, and ease financial burdens on New Yorkers. The toll system is not expected to increase beyond $9 before 2027 or $12 before 2030, providing commuters with predictable costs in the coming years.