New York governor pumps the brakes on Manhattan congestion pricing plan

New York Gov. Kathy Hochul halted a plan to charge most motorists $15 to enter the core of Manhattan, upending the nation’s first “congestion pricing” system on June 5 just weeks before it was set to launch.

The announcement dealt a stunning blow to a program, years in the making, that was intended to raise billions of dollars for New York’s beleaguered subways and commuter rails while reducing emissions and gridlock on the city’s streets.

In a pre-recorded video statement, Ms. Hochul, a Democrat, said she had arrived at the “difficult decision that implementing the planned congestion pricing system risks too many unintended consequences at this time.”

She cited New York’s fragile economic recovery from the COVID-19 pandemic, as well as the financial burden that the toll would pose on state residents struggling with inflation, as reasons to “indefinitely pause the program.”

“A $15 charge might not seem like a lot to someone who has the means but it can break the budget of a hardworking or middle class household,” Ms. Hochul said. “It puts the squeeze on the very people who make this city go.”

The program was scheduled to begin on June 30, five years after it was first signed into law by the former Gov. Andrew Cuomo and more than a decade after it was first proposed. It had divided many in the region, pitting drivers against those who rely on the city’s public transit system.

Until June 5, Ms. Hochul had been one of the plan’s staunchest backers, describing the “transformative” impact it would have on the climate and the city’s transit services as recently as two weeks ago.

The abrupt reversal sent shockwaves through New York’s political circles, while raising questions among transportation advocates about how the state would pay for badly needed transit upgrades previously slated to be funded by the toll revenue.

Kate Slevin, executive vice president of the Regional Plan Association, a nonprofit advocacy group, called the move “a total betrayal of New Yorkers and our climate.”

As the plan neared its launch date, it drew increasing pushback from commuters and officials in the city’s suburbs. Ms. Hochul, who is helping to lead Democrats’ efforts to retake congressional seats in New York, has largely geared her political strategy toward addressing the concerns of suburban voters.

U.S. Rep. Pat Ryan, a Democrat who represents a Hudson Valley district north of the city, touted his role in killing the plan, noting in a statement that he’s “proud to say we’ve stopped congestion pricing in its tracks.”

Other opponents of the plan – including unions representing teachers and police officers, truckers, and several officials in New Jersey and Connecticut – also celebrated the decision.

The plan called for people driving passenger vehicles into Manhattan below 60th Street – roughly the area south of Central Park – to pay at least $15, with larger vehicles paying more. These payments would come on top of already steep tolls for using bridges and tunnels to enter Manhattan.

The Metropolitan Transportation Authority, which would have overseen the program, has largely completed the process of installing cameras, sensors, license plate readers, and other equipment on city roadways in anticipation of the plan’s launch. And they have inked contracts to pay more than $500 million to private vendors for the design and operation of that technology.

Neither the MTA nor Ms. Hochul’s office responded to questions about whether any of that money would be recouped if the plan does not move forward.

“The public should be questioning why we spent hundreds of millions of dollars on equipment that’s just going to sit there and what that tells us about the governor’s priorities,” said Rachael Fauss, a policy adviser at Reinvent Albany, a good government group.

New York City Mayor Eric Adams, a one-time supporter of congestion pricing who has voiced his own reservations about the plan in recent months, said he backed the governor’s decision to halt the program.

“If she’s looking at what other ways we can do it and how we can do it correctly, I’m all for it,” he said. “This is a major shift for our city and it has to be done correctly.”

In her comments June 5, Ms. Hochul said she remains committed to funding the state’s transportation initiatives, but did not specify where the money would come from. Any additional tax would require the approval of the state legislature, which is set to end its session this week.

Delaying the plan will require the approval of the MTA’s board, which is controlled by Ms. Hochul. Some members of the board said they had not been briefed by the governor prior to the announcement and expressed confusion about how key projects, including signal upgrades and rail improvements, would now be funded.

“How are we going to replace a third of the capital budget?” asked David Jones, a board member. “Is the governor going to provide the billions that are being taken away in some other manner? This could lead to a real financial disaster.”

This story was reported by The Associated Press. Associated Press reporter Anthony Izaguirre in Albany, New York, contributed to this report.