What Is New York City’s New Congestion Tax Scheme?

Submitted by dkellogg on Wednesday, December 1st, 2021, 4,59 PM

Back in 2019 the New York State legislature approved a “congestion pricing” plan for downtown New York City.  

The basic concept is simple: tax people for entering highly congested areas, thus reducing the traffic. 

This idea is meant to harness the “nonlinear” nature of traffic congestion. As a highway reaches its design capacity, each additional vehicle added to the road creates more congestion than the vehicle that came before it. Also, the reverse is true. That is what the policy is built upon: even a small decrease in the number of vehicles can visibly ease congestion.

New York would be the first state to introduce such a plan, formally named the ‘Central Business District Tolling Program’. The planned pricing area would consist of Manhattan downtown, that is all streets and roadways south of 60th Street, except the FDR Drive, the West Side Highway, sections of the Battery Park Underpass and Hugh Carey “Brooklyn-Battery” Tunnel that connect the FDR Drive to the West Side Highway.   

The pricing is not determined yet and will be decided according to how many credits and exemptions are given out, but it will likely be around $12 – 14 for passenger vehicles, and $25 for trucks. The fee would operate on a once-a-day basis.   

The congestion tax is expected to pay for 30% of the $51 billion capital investment plan of the Metropolitan Transportation Authority (MTA) – with 80% of funds is planned to go to New York City buses and subways, and 10% each to the Long Island Rail Road and Metro-North Railroad.   

Since the passage of the bill, the Governor of New York changed, with Kathy Hochul taking over, as well as the federal administration. Now given approval, a long process has started in which the MTA will meet with federal, local, and state agencies. Also, on September 23, a series of virtual public hearings have started, running through October. Additionally, the most important time-related factor is that an environmental assessment needs to be carried out, which will supposedly take until late 2022, delaying the actual implementation of congestion pricing to 2023. 

A fundamentally critical point of this policy is that it provides more funding for the MTA on the expense of commuters, ultimately introducing a new kind of tax for driving downtown. The issue with it is that the MTA have already received huge amounts of federal funding, despite its questionable management efficiency and a just recently surfaced example of its poor stewardship. It is a fair question to ask whether the best way to make the NY metro more developed and efficient is providing it with more money, especially as it was in deficit even before the hurdle of the coronavirus hit. 

This reservation resonates with the costly nature of introducing such a plan. An operational system for enforcing the regulation would need to be designed, which requires investment in infrastructure and manpower. TransCore, a private company based in Nashville was already awarded in 2019, contracting with MTA $507 million for the design, building, and operation of such a system. 

Moreover, the different aims of the policy seem conflicting, as it is aiming to result in fewer people on the roads, however, that means lesser revenue ultimately.  Thus, the sustainability of the plan, that is being efficient rather than consuming more funds, is questionable.

Something to take into consideration after assessing the costs, is who would pay for it and by what means. Businesses which will have to continue getting their supply downtown by trucks will raise their prices or lower their wages, harming their consumers or workers. Rideshare companies will also pass the hike to their customers, making an otherwise reasonable alternative to driving one’s own car more costly. And although the rate probably won’t be firmly regressive, as less low-income people drive into the Manhattan area, by making living-general costs higher, the policy could easily result in excluding outer-borough residents and unfavorable treatment of commuters.

Rather than raising even more revenue for an authority of seemingly not the best management skills by making people not using the service pay for it, the government should apply reforms addressing the core problems of the metro system. And as for easing congestion, the named main goal of the policy, valid alternatives which make the existing system more efficient (like cashless tolling on the Thruway) should be examined.  

PHOTO credits:

Taken on 23 April 2018, 08:49:52

Source: Own work

Author: Tdorante10

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