Hochul Cancels Congestion Pricing for Manhattan

For a politician, fear of voter reaction to a bad policy is a healthy impulse. So it’s a nice surprise that New York’s governor Kathy Hochul, who is pretty far left on most things, decided at the last minute to cancel the congestion pricing plan that had been scheduled to go into effect in New York City at the end of June. Gov. Hochul was clearly afraid that angry middle class voters would take their revenge on her party in November. Her last minute action will save every outer borough or suburban New Yorker $15 each time they drive into Manhattan below 60th Street.

A majority in the city was staunchly opposed to the plan. Supporters included some Manhattanites, likely those who are impervious to cost considerations, and often don't drive, as well as rabid "climate change" activists, and the core group of people devoted to public transportation that were eager for the additional billion dollars in funding that the congestion pricing promised to provide.

But recent polls indicated that 64 percent of New York City residents, and 63 percent of New York State residents opposed the policy. That includes people who drive into the city daily for work, as many cops, firefighters, and EMS workers do from distant suburbs. It includes many people from bordering suburban districts which have switched from Democrat to Republican in recent elections. The degree of hatred for this policy would not bring any of them back to the Democratic fold and might swing others to the GOP.

Well, there are elections coming up.

Furthermore, there were several lawsuits underway from the governor of New Jersey, Phil Murphy, whose state residents already pay hefty bridge and tunnel tolls to get into Manhattan, as well as from some N.Y. lawmakers, and unions.

The plan was to charge passenger cars $15 to enter the congestion zone below 60th Street. Smaller trucks would be billed at $24, larger ones at $36. Taxis would be billed an additional $1.25, and Lyft and Uber and other ridesharing services would pay $2.50. The stated goal of the policy was to raise a billion dollars a year in revenue that could be used by the Metropolitan Transit Authority (MTA) to fix subways and pay for enhancement projects for public transportation.

Governor Hochul was a staunch supporter of the plan until she wasn’t. She has pitched herself as a serious "climate change" activist. Her last minute reversal has shocked allies. Her stated rationale for canceling the policy is twofold. First, she concedes that the opposition to the plan was vehement. She thinks that the rise in the cost of commuting would be unbearable to families that are struggling financially under the Biden inflation. (Not that she used the term “Biden inflation.”) Indeed, $3,600 per year for commuting is a heavy tax indeed. So maybe she felt some compassion, real or political, for struggling middle class families who need to show up in Manhattan regularly. Or maybe she just feared how they might vote.

As she put it, “Let’s be real: a $15 charge may not mean a lot to someone who has the means, but it can break the budget of a working- or middle-class household,” she said in a pre-taped video announcement. “It puts the squeeze on the very people who make this city go,” the New York Post reported. She added, “I cannot add another burden to working middle class New Yorkers or create another obstacle to our continued economic recovery” from the Covid-19 pandemic.

Her second consideration, a serious one, is that Manhattan has been slower than most places to recover from the sequestrations of the pandemic. Restaurants and entertainment venues haven’t gotten back their pre-pandemic crowds. With restaurants, that’s partly because so many people have not returned to work in offices in downtown Manhattan that all of the services that support those workers are suffering. The extra $15 per day might just dissuade already reluctant workers from coming back. Similarly with entertainment. None of it is cheap, and the more you pile additional transportation costs on, the easier it is for a would-be patron to forego an outing to the theater, an art gallery, or the opera.

Meanwhile, Hochul now has some new very fierce critics, especially from the transit advocate community.

Maybe getting rid of these might help.

Is congestion pricing all bad?  It's conceivable that it could have been done in a much less onerous way, that might have decongested the streets of midtown and downtown Manhattan without placing such a high tax on drivers. And a lot of that congestion could be mitigated with the removal of excess bike lanes, and the dining sheds that restaurants still have lining the streets from the pandemic.

In a New York Times op-ed Manhattan Institute fellow Nicole Gelinas, who supports some form of congestion pricing and amelioration, argued that charging significantly lower fees, and charging them over a shorter part of the day, instead of all 24 hours, would have made the policy less onerous and unpopular. She noted that we now have the technology to charge a truck, for instance, for the time it spends making deliveries in the congestion zone, not merely for entering briefly. She thought that the fact that the policy was geared toward raising a billion dollars a year, instead of focusing on lowering traffic and thereby, pollution, made it inflexible and expensive in ways that citizens find punitive.

But the MTA really, really wanted that billion dollars a year from what amounted to a punitive tax on commuters and commerce. Now they are getting nothing. It remains to be seen how the governor will make up the difference from some other source. Chances are someone’s taxes will be going up.