Feds slam brakes on NYC’s congestion pricing program

The Trump administration Wednesday terminated federal approval for New York City’s congestion pricing program just weeks after it took effect.

The Metropolitan Transportation Authority immediately headed to federal court to try to keep the program remains in place.

“New York State’s congestion pricing plan is a slap in the face to working class Americans and small business owners,” Transportation Secretary Sean Duffy said in a statement. 

“Commuters using the highway system to enter New York City have already financed the construction and improvement of these highways through the payment of gas taxes and other taxes. But now the toll program leaves drivers without any free highway alternative, and instead, takes more money from working people to pay for a transit system and not highways.”

The January launch of a $9 toll for most drivers entering Manhattan south of 60th Street marked a milestone for a program first proposed by former Mayor Michael Bloomberg in 2007. The program was beset with lawsuits before New York Gov. Kathy Hochul, a Democrat, abruptly halted the program last June citing concerns about cost. She resurrected the program in November with lower tolls than originally planned. Hochul and the MTA raced to begin the program before Trump’s inauguration.

New York is now the first city in the U.S. to charge tolls for congestion. The revenue is planned to back $15 billion of bonds to pay for the MTA’s capital projects.

Duffy, who took office on Jan. 29, said President Donald Trump asked him to review the Federal Highway Administration’s approval of the congestion pricing program as a pilot program under the federal Value Pricing Pilot Program, or VPPP.

In a Wednesday letter to New York Democratic Gov. Kathy Hochul, Duffy said he agreed with Trump’s concerns about the extent of the tolling on highways that had been built with federal-state funds as well as the burden on drivers in New York and surrounding areas.

Duffy said the DOT was terminating its approval because the program does not offer a toll-free alternative to lower Manhattan and because the tolls raised revenue for the city’s transit system as opposed to the need to reduce congestion.

“By doing so, the pilot runs contrary to the purpose of the VPPP, which is to impose tolls for congestion reduction — not transit revenue generation,” he said. The DOT’s move terminates the FHWA’s Nov. 21 VPPP agreement.

Duffy noted that previous FHWA approval was only for a pilot program and said he would contact “project sponsors to discuss the orderly cessation of toll operations under this terminated pilot project.”

The MTA moved quickly to challenge the decision by filing a lawsuit. MTA chair and CEO Janno Lieber said the “highly successful” program has reduced congestion and led to faster travel times. The program would “continue notwithstanding this baseless effort to snatch those benefits away from the millions of mass transit users, pedestrians and, especially, the drivers who come to the Manhattan Central Business District,” Lieber said.

“It’s mystifying that after four years and 4,000 pages of federally-supervised environmental review — and barely three months after giving final approval to the Congestion Relief Program — USDOT would seek to totally reverse course.”