NY Governor Postpones Manhattan Congestion Tolls

Facing a slew of lawsuits and a potential election issue, Gov. Kathy Hochul has abruptly postponed the implementation of congestion pricing tolls in Manhattan that were scheduled to go into effect on June 30.

The first-in-the-nation congestion tolls, which would charge $15 for passenger cars driving south of 60th Street from 5 a.m. to 9 p.m. on weekdays, have been “indefinitely postponed,” Hochul announced on Wednesday.

In a video message, Hochul cited inflation, the lingering effects of the pandemic on the city’s economy and the impact of the tolls on working families as primary reasons for her decision to shelve the implementation of congestion pricing.

“Hard-working New Yorkers are being hammered on costs. They—and the economic vitality of our city—must be protected,” Hochul said.

“Let’s be real: A $15 charge may not seem like a lot to someone who has the means but it can break the budget of a hard-working and middle-class household,” she added.

Citing vacancy rates of close to 20% in Manhattan’s office sector and three-day-a-week office attendance by workers, the governor warned that the new tolls might spur more workers to go fully remote during the week and reduce the number of visitors to Manhattan on weekends.

Hochul said the new tolls would create another “obstacle” to NYC’s recovery from the pandemic. “I won’t allow this delicate recovery to be jeopardized,” she said.

Several reports said Hochul faced intense pressure to postpone the new tolls from lawmakers who are on the November ballot in suburban districts where there is widespread opposition to the congestion pricing scheme.

Still unresolved are nine lawsuits seeking to block the congestion pricing tolls, including a legal challenge filed by New Jersey. Gov. Phil Murphy has branded the new tolls, which will fund the Metropolitan Transit Authority’s capital improvements budget, a “cash grab” by New York.

Last week, the Trucking Association of New York filed a federal lawsuit against the MTA aiming to exempt trucks from the congestion pricing tolls.

Trucks will be subject to tolls ranging from $24 to $36, depending on their size, under the congestion pricing plan. Noting that nearly 90% of the products in NYC are delivered by trucks, the association warned that increased costs from the tolls will be passed on to consumers.

The MTA, currently operating at less than 80% of its pre-pandemic passenger volume, faces a potential budget deficit of up to $1B without the implementation of congestion tolls.

“Delaying congestion pricing is a slap in the face to the millions of New Yorkers who rely on public transportation every day just to appease the program’s loudest foes,” Elizabeth Adams, deputy director for public affairs for Transportation Alternatives, a public transit advocacy group, said in a statement. “Congestion pricing is a $15 billion lifeline for the MTA—critical funding that will be lost if the program is stalled.”

Hochul said she remains committed to the transit improvements that were earmarked to receive funding from congestion tolls.