After congestion pricing 'pause,' what's next for Long Island commuters and MTA funding
It's too soon to say what will happen to the cameras and license plate scanners installed around Manhattan for congestion pricing, officials said. Credit: Bloomberg / Jeenah Moon
Gov. Kathy Hochul’s decision this past week to abandon the state’s long-awaited congestion pricing program, just days before it was set to take effect, left opponents of the plan elated, supporters outraged and people on both sides with lots of questions.
The first-in-the-nation initiative was scheduled to start June 30, and would have charged most vehicles $15 for driving below 60th Street in Manhattan during peak hours. The policy, debated in New York City for more than two decades, aimed to reduce traffic, improve air quality and raise needed funding for transit.
But Hochul's reversal Wednesday, announced in a recorded statement in which she directed the Metropolitan Transportation Authority to “indefinitely pause” congestion pricing, comes with enormous repercussions for the future of Long Island's commute and the region's public transportation agency.
Here’s what’s known about Hochul’s decision, its impact, and what comes next.
Those who need to drive into the city regularly for work or medical appointments could have paid thousands of dollars a year in new tolls — a reality, opponents said, that could have led to many of them leaving the state. There also was concern that some businesses affected by the tolls would have passed on the added costs to customers.
But nearly 90% of the approximately 96,800 Nassau and Suffolk residents commuting into Manhattan use public transportation. Those commuters, MTA officials emphasized, would have benefited from transit investments — including on the Long Island Rail Road — that would have been funded by the toll revenue. Motorists, too, would have benefited from lighter traffic, proponents have said.
Hochul's decision caught MTA officials by surprise and dealt a devastating blow to the transit authority's finances. The MTA was counting on the $1 billion in projected annual revenue from the tolls to support $15 billion in bonds that would have paid for several planned projects in its current five-year, $55 billion capital budget. Without the funding, those projects remain on hold indefinitely, and could be nixed altogether. The state Comptroller's Office also has warned that losing the expected toll revenue could put added pressure on the MTA to raise fares and tolls and cut service.
In their first statement since Hochul's reversal, MTA officials said Friday night that they "cannot award contracts that do not have a committed, identified funding source," and that several projects "will likely need to be deprioritized to protect and preserve the basic operation and functionality" of the transit system.
Of the $15 billion of infrastructure investments that would have been funded through the tolls, $1.5 billion had been earmarked, under state law, to the LIRR. The money would have gone to projects, including:
New elevators in Massapequa and Valley Stream, Structural improvements in the LIRR's Atlantic Avenue Tunnel to Brooklyn and to its Babylon switch interlocking, Replacement of an electrical substation at Jamaica, Renovation of the Babylon station, Purchase of the LIRR's next fleet of electric train cars and diesel locomotives, Rehabilitation of the railroad's Ronkonkoma parking garage,.
The futures of those and dozens of other projects are now up in the air.
Hochul has said she's committed to advancing all the infrastructure projects that were promised, but it's unclear how she plans to pay for it. She said the state has “set aside funding to backstop the MTA Capital Plan,” maybe coming from a $20 billion state reserve fund. But a short-term infusion of cash would not replace the recurring, $1 billion annual funding stream that would have come from the tolls, and would be needed to support long-term bonds.
Hochul floated the idea of a payroll tax increase for New York City employers. But on Friday, the Democratic majorities of the Assembly and State Senate refused to accept Hochul’s proposals. The State Legislature also refused to pass Hochul’s resolution to commit $1 billion now to the MTA for next year — an IOU of sorts. Legislators could return later in the year to act or Hochul could use reserve funds to fill the gap.
Hochul said her reversal came out of concern over “unintended consequences” of the new tolls, including their potential to overburden New Yorkers already struggling with the high cost of living, and slow Manhattan’s economic recovery from COVID-19. But, because that reasoning could have been used at any time in the last several years to halt the plan, critics have said Hochul’s decision to pull the plug now was driven by political pressure from fellow Democrats, including in Congress, concerned that voters would have held the new tolls against them in November’s election.
Although Hochul is calling it a "temporary pause," she offered no timetable to resurrect the plan. Hochul talked about finding “other ways” to achieve the goals of congestion pricing, including reducing traffic, improving air quality and generating new funding for the MTA. But some observers, including Republican Hempstead Town officials suing to stop congestion pricing, predict Hochul will bring back the plan after November's election, potentially with some tweaks to make it more palatable to the public.
Also unclear is whether Hochul can unilaterally halt the plan, which was adopted by the legislature in 2019 and received final approval in March by the MTA, an independent public authority whose board members remain largely in favor of congestion pricing. The board is set to meet on June 26, but Hochul said Friday "it is not necessary" for a vote to be held.
The MTA’s statement, from chief financial officer Kevin Willens and general counsel Paige Graves, also said the agency could now not implement congestion pricing, because “we no longer have the State’s consent.”
Even if Hochul does find a way to make the MTA financially whole, there’s still the matter of addressing the other goals of congestion pricing — passed into law five years ago. That includes reducing traffic in Manhattan. MTA officials predicted that congestion pricing would have taken more than 150,000 cars off the road each day. Hochul said the state will “tackle congestion in other ways,” but hasn’t said how. Congestion pricing was also seen as key to achieving New York’s goal of cutting greenhouse gas emissions 40% by 2030 and 85% by 2050. Hochul said state officials “will continue to pursue our environmental objectives.”
The MTA has spent hundreds of millions of dollars preparing for congestion pricing, and all that work would go to waste if the plan is abandoned for good. A $550 million contract paid for cameras and scanners installed on more than 100 gantries throughout Manhattan and hundreds of workers needed to help administrate the new tolls. The MTA separately has hired about 100 employees for congestion pricing-related roles. MTA officials said it is too early to tell what will become of the workers, or the installed infrastructure. Also pending are several lawsuits challenging congestion pricing that have been fought in court by MTA-hired lawyers. On Wednesday, one of those lawyers, Roberta Kaplan, in a letter to judges said MTA officials “no longer anticipate implementation” of the plan later this month.
Gov. Kathy Hochul’s decision this past week to abandon the state’s long-awaited congestion pricing program, just days before it was set to take effect, left opponents of the plan elated, supporters outraged and people on both sides with lots of questions.
The first-in-the-nation initiative was scheduled to start June 30, and would have charged most vehicles $15 for driving below 60th Street in Manhattan during peak hours. The policy, debated in New York City for more than two decades, aimed to reduce traffic, improve air quality and raise needed funding for transit.
But Hochul's reversal Wednesday, announced in a recorded statement in which she directed the Metropolitan Transportation Authority to “indefinitely pause” congestion pricing, comes with enormous repercussions for the future of Long Island's commute and the region's public transportation agency.
Here’s what’s known about Hochul’s decision, its impact, and what comes next.
How's this help or hurt Long Islanders?
Those who need to drive into the city regularly for work or medical appointments could have paid thousands of dollars a year in new tolls — a reality, opponents said, that could have led to many of them leaving the state. There also was concern that some businesses affected by the tolls would have passed on the added costs to customers.
But nearly 90% of the approximately 96,800 Nassau and Suffolk residents commuting into Manhattan use public transportation. Those commuters, MTA officials emphasized, would have benefited from transit investments — including on the Long Island Rail Road — that would have been funded by the toll revenue. Motorists, too, would have benefited from lighter traffic, proponents have said.
What does this mean for the MTA?
Hochul's decision caught MTA officials by surprise and dealt a devastating blow to the transit authority's finances. The MTA was counting on the $1 billion in projected annual revenue from the tolls to support $15 billion in bonds that would have paid for several planned projects in its current five-year, $55 billion capital budget. Without the funding, those projects remain on hold indefinitely, and could be nixed altogether. The state Comptroller's Office also has warned that losing the expected toll revenue could put added pressure on the MTA to raise fares and tolls and cut service.
What projects could be on the chopping block?
In their first statement since Hochul's reversal, MTA officials said Friday night that they "cannot award contracts that do not have a committed, identified funding source," and that several projects "will likely need to be deprioritized to protect and preserve the basic operation and functionality" of the transit system.
Of the $15 billion of infrastructure investments that would have been funded through the tolls, $1.5 billion had been earmarked, under state law, to the LIRR. The money would have gone to projects, including:
- New elevators in Massapequa and Valley Stream.
- Structural improvements in the LIRR's Atlantic Avenue Tunnel to Brooklyn and to its Babylon switch interlocking.
- Replacement of an electrical substation at Jamaica.
- Renovation of the Babylon station.
- Purchase of the LIRR's next fleet of electric train cars and diesel locomotives.
- Rehabilitation of the railroad's Ronkonkoma parking garage.
The futures of those and dozens of other projects are now up in the air.
Where else can Hochul find the money?
Hochul has said she's committed to advancing all the infrastructure projects that were promised, but it's unclear how she plans to pay for it. She said the state has “set aside funding to backstop the MTA Capital Plan,” maybe coming from a $20 billion state reserve fund. But a short-term infusion of cash would not replace the recurring, $1 billion annual funding stream that would have come from the tolls, and would be needed to support long-term bonds.
Hochul floated the idea of a payroll tax increase for New York City employers. But on Friday, the Democratic majorities of the Assembly and State Senate refused to accept Hochul’s proposals. The State Legislature also refused to pass Hochul’s resolution to commit $1 billion now to the MTA for next year — an IOU of sorts. Legislators could return later in the year to act or Hochul could use reserve funds to fill the gap.
Why is Hochul doing this now?
Hochul said her reversal came out of concern over “unintended consequences” of the new tolls, including their potential to overburden New Yorkers already struggling with the high cost of living, and slow Manhattan’s economic recovery from COVID-19. But, because that reasoning could have been used at any time in the last several years to halt the plan, critics have said Hochul’s decision to pull the plug now was driven by political pressure from fellow Democrats, including in Congress, concerned that voters would have held the new tolls against them in November’s election.
Is this really the end of congestion pricing, or will it be back?
Although Hochul is calling it a "temporary pause," she offered no timetable to resurrect the plan. Hochul talked about finding “other ways” to achieve the goals of congestion pricing, including reducing traffic, improving air quality and generating new funding for the MTA. But some observers, including Republican Hempstead Town officials suing to stop congestion pricing, predict Hochul will bring back the plan after November's election, potentially with some tweaks to make it more palatable to the public.
Also unclear is whether Hochul can unilaterally halt the plan, which was adopted by the legislature in 2019 and received final approval in March by the MTA, an independent public authority whose board members remain largely in favor of congestion pricing. The board is set to meet on June 26, but Hochul said Friday "it is not necessary" for a vote to be held.
The MTA’s statement, from chief financial officer Kevin Willens and general counsel Paige Graves, also said the agency could now not implement congestion pricing, because “we no longer have the State’s consent.”
What are some of the other impacts of this?
Even if Hochul does find a way to make the MTA financially whole, there’s still the matter of addressing the other goals of congestion pricing — passed into law five years ago. That includes reducing traffic in Manhattan. MTA officials predicted that congestion pricing would have taken more than 150,000 cars off the road each day. Hochul said the state will “tackle congestion in other ways,” but hasn’t said how. Congestion pricing was also seen as key to achieving New York’s goal of cutting greenhouse gas emissions 40% by 2030 and 85% by 2050. Hochul said state officials “will continue to pursue our environmental objectives.”
What about the cameras and scanners installed, and hundreds of millions spent?
The MTA has spent hundreds of millions of dollars preparing for congestion pricing, and all that work would go to waste if the plan is abandoned for good. A $550 million contract paid for cameras and scanners installed on more than 100 gantries throughout Manhattan and hundreds of workers needed to help administrate the new tolls. The MTA separately has hired about 100 employees for congestion pricing-related roles. MTA officials said it is too early to tell what will become of the workers, or the installed infrastructure. Also pending are several lawsuits challenging congestion pricing that have been fought in court by MTA-hired lawyers. On Wednesday, one of those lawyers, Roberta Kaplan, in a letter to judges said MTA officials “no longer anticipate implementation” of the plan later this month.
Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.
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