New York’s first-in-the-nation congestion pricing toll, after being started just a month and a half ago, may be counting its final days after the Trump administration pulled federal approval of the program.
In a letter sent Wednesday to New York Gov. Kathy Hochul, U.S. Transportation Secretary Sean Duffy said the department rescinded the federal support for the program that began Jan. 5 to toll vehicles entering Manhattan’s central business district below 60th Street, an area that’s known for its tourist attractions from Times Square to the Empire State Building.
Real estate industry watchers have said it remains to be seen how the tolls could affect Manhattan’s office attendance rate, especially for drivers commuting to the city.
Except for limited exceptions allowed by Congress, highways constructed with Federal-aid Highway Program funds cannot be tolled, the letter said, adding that the “unprecedented” program provides no toll-free option for many drivers who want or need to travel by vehicle in the “major urbanized area.” The toll rate also was set primarily to raise revenue for transit, rather than at an amount needed to reduce congestion, the letter said.
“New York State’s congestion pricing plan is a slap in the face to working class Americans and small business owners,” Duffy said in the letter. “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. It’s backwards and unfair.”
Hochul, after halting the start of the nation's first traffic tolls aimed at reducing vehicle congestion last year, revived the plan and cut the proposed pricing in November before it went into effect earlier this year. The plan, mandated by the state in April 2019 before the pandemic, was originally designed to help reduce traffic and pollution in Manhattan's core. The tolls also were aimed to help fund the overhaul and other capital needs of the Metropolitan Transportation Authority, operator of the region’s subway, bus and commuter railroad systems.
Hochul’s office, in response, said Wednesday that the toll has achieved its intended goal.
“Congestion has dropped dramatically, and commuters are getting to work faster than ever,” Hochul said in a statement. “Broadway shows are selling out and foot traffic to local businesses is spiking.”
The MTA has initiated legal proceedings in the Southern District of New York to “preserve this critical program,” she said.
Traffic data
In the first week of February, weekday vehicle traffic inside the toll zone fell 9% from the same time last year, The New York Times reported, citing data from the MTA. Meanwhile, foot traffic data that gauges business activity has risen about 5% through Jan. 31 from the same time a year earlier, the Times said, citing data from the city’s Economic Development Corp.
Hochul said in June the original toll plan could lead drivers to stay home and further entrench remote working, depressing foot traffic to area restaurants and other businesses and services.
New Jersey in January began a marketing campaign to convince New York companies to let employees who are Garden State residents work from home — or out of satellite offices so they can avoid the tolls.
Some area governments representing commuters to the city and other groups cheered the Trump administration’s move.
“The current program lines the MTA’s pockets at the expense of New Jerseyans,” New Jersey Gov. Phil Murphy, whose administration has filed a lawsuit against the tolls, said on social media platform X on Wednesday. He had previously said the tolls couldn’t have come at a worse time as “the vast majority of Americans are experiencing severe economic strains and still feeling the effects of inflation.”
Murphy was said to have written to President Donald Trump on Jan. 20 to ask for his help to stop the program.