MTA bows to Hochul, shelves congestion pricing, creating $16.5B shortfall

The MTA Board on Wednesday voted to formally shelve its congestion pricing plan, acquiescing to the demands of Gov. Kathy Hochul even as the move triggers a funding shortfall now estimated at $16.5 billion.

Despite calls from project supporters for the Metropolitan Transportation Authority to forge ahead with its Central Business District Tolling Program, MTA chairman and CEO Janno Lieber said the transit agency had little choice but to abide by Hochul’s order to indefinitely pause the first-in-the-nation congestion pricing plan, even though it means deferring several system expansion projects and focusing instead on basic maintenance work needed to keep the system running.

“We live in the real world,” Lieber told reporters following the MTA’s monthly board meeting. “We’re not coming up with plans to go rogue and have a coup against the state of New York.”

After years of support for congestion pricing, Hochul earlier this month ordered a stop to the plan, three weeks before it was set to take effect, citing affordability concerns. In a statement Wednesday, Hochul reiterated her commitment to working with the MTA “to further develop a comprehensive approach to fund” its capital needs.

“While the timing of the next budget may necessitate temporary adjustments to the timeline of certain contracts, there is no reason for New Yorkers to be concerned that any planned projects will not be delivered,” Hochul said.

Despite Hochul’s assurances, MTA officials painted a dire picture of their capital finances at the Manhattan meeting. Transit advocates gathered in big numbers to voice their support for congestion pricing and express anger at Hochul for, at least temporarily, abandoning the plan.

“I thought there would be a pretty powerful reaction to this terrible mistake, but it’s been much bigger than I expected,” Pete Sikora, senior advisor for New York Communities for Change, a Brooklyn- based nonprofit focused on social and economic causes, said at a rally outside MTA headquarters before the meeting. “People are really ticked off at the governor.”

The MTA’s Central Business District Tolling Program — debated for decades and adopted as state law in 2019 — would have charged most vehicles $15 for driving below 60th Street in Manhattan during peak hours. The policy aimed to reduce traffic in Manhattan, improve air quality and generate $1 billion in annual toll revenue for MTA infrastructure.

The MTA planned to use the funding to finance $15 billion in projects. The agency stands to lose another $1 billion from federal funding that will be lost and $500 million from the cost of the tolling infrastructure, which cannot be recovered without the toll money.

The vote went down the same as when the board set the proposed toll in December and approved congestion pricing in March, with only Nassau representative David Mack — a vocal congestion pricing opponent — voting “no.” Mack opposed the latest proposal because it affirmed the board’s commitment to moving ahead with congestion pricing at a later date.

“I want to see the MTA grow. I want to see everybody happy. But there are many other ways that this could be accomplished,” Mack said before casting his vote. “We just have to find them.”

Board member Sammy Chu, of Lindenhurst, who was appointed by Hochul, expressed his disappointment over the collapse of what he called the most significant “behavior modification initiative … in a generation.”

While he acknowledged affordability concerns raised by opponents, Chu said many of them were “solvable.”

“Until we have the stomach to understand that we are not going to get the change we are looking for without discomfort, we are not going to be able to move policies like this forward,” Chu said.

The proposal before the MTA Board asked members to vote to “acknowledge” the pause directed by the governor and push the new implementation date for congestion pricing “until after such time as the required final agreement has been executed” by the project’s sponsors, including the state Department of Transportation, which takes orders from Hochul.

With $28.5 billion in planned projects and only $12 billion in remaining funding, the MTA will prioritize “fundamental state of good repair” efforts, projects that could include federal funding, and train purchases — including additional LIRR cars to meet the demand of running the extra service that was added with the opening of Grand Central Madison.

The cuts coming to the LIRR are far less than those planned for other MTA agencies, including the New York City Transit bus and subway system. Lieber said “there is less in play” on Long Island, because most of the LIRR projects in the current capital program have already been funded or even completed. That includes several station accessibility projects on the Babylon line.

The only LIRR-specific projects included in the released list of congestion pricing-related casualties are the “potential cancellation” of planned renovations of the Hollis and Forest Hills stations, and the purchase of “passenger and work locomotives.” MTA officials later said planned work at the LIRR’s Harold Interlocking in Queens that was related to the new link to Grand Central Madison is also on hold.

On the chopping block are system expansion projects, including the Second Avenue Subway. The MTA will repurpose $3 billion in allotted funds for the effort and “sacrifice” $2 billion in federal grant money for the project. Some subway signal modernization projects, planned improvements to the Verrazzano-Narrows Bridge, purchases of electric city buses and various other infrastructure and technology upgrades are also being put on hold.

Lieber said the MTA “will work with everyone,” including Hochul, to try to come up with a new funding source and to “preserve and revive” congestion pricing. That includes keeping tolling infrastructure “in operating order so it’s ready when the temporary pause is, in fact, lifted.”

Rachael Fauss, a senior policy adviser for Reinvent Albany, a nonprofit government accountability organization, expressed skepticism over Hochul’s promises to find the money the MTA needs. She said her organization estimates the congestion pricing pause could put 100,000 New Yorkers’ jobs at risk.

“It’s completely counter to the governor saying that her decision is about affordability,” Fauss said. “We think that the economic impact is huge, and there’s no viable alternative.”