MTA confirms congestion pricing won’t go into effect on June 30

Lawmakers have not found an alternative source of funding for the MTA, and the agency said it will have to cut programs if the governor doesn’t let congestion pricing go into effect.

Gov. Kathy Hochul speaks the press about MTA funding on June 7, 2024.

Gov. Kathy Hochul speaks the press about MTA funding on June 7, 2024. Austin C. Jefferson

It seems that you can stop congestion pricing with a Youtube video. 

On Friday, the Metropolitan Transportation Authority confirmed that congestion pricing would not go into effect on June 30, days after Gov. Kathy Hochul announced that she was indefinitely delaying the start of the program.

“New York State law places an obligation on MTA to implement a congestion pricing program, and the agency stands ready to do so. But under applicable federal law and regulation, the MTA cannot act until the Central Business District Tolling Program is approved by New York State, New York City and the federal government – and with the announcement of the pause, we no longer have the State’s consent,” the agency said in a statement.

Following years of debate, the state Legislature in 2019 passed a law mandating the implementation of a congestion pricing scheme in Manhattan. The MTA spent millions conducting studies and buying equipment to prepare for the start of the congestion pricing program on June 30.

After days of ducking the press, Hochul finally took questions about her abrupt decision to delay the start of congestion pricing on an “indefinite pause” less than a month before it was meant to begin. She faced the public only after the state Legislature officially killed her attempts to find a temporary funding solution for the MTA, and she stuck to her guns despite the intense backlash she has faced. But she had few answers to big questions about potential new revenue streams, her legal authority and whe, if ever, congestion pricing would unpause.

On Friday evening, Hochul told reporters that she intended to work with the MTA to find a path forward for their planned expansions and repairs, although she didn’t say how she would do that. She insisted that she and the MTA’s leadership had the authority to unilaterally delay congestion pricing from going into effect on June 30 and said that the MTA board – some of whose members have vocally opposed the delay – would not be required to vote on the matter.

“I assure you, we've already looked into this,” Hochul said. “We’ve had constant communication with the MTA, their attorneys (and) their financial team on what is required to allow them to continue going forward, and that is why we're working closely with the leaders right now to identify a subsequent funding source.” 

Politico reported earlier this week that House Minority Leader Hakeem Jeffries had pushed the governor to delay congestion pricing because he was worried that it would hurt Democrats’ chances in suburban House races. But Hochul denied that politics had played a role in her decision. 

She said that she has “a real pulse on what New Yorkers think” and was responding to constituents who had expressed anxiety about congestion pricing. She cited a hardware store owner concerned about losing his customers from New Jersey who drive and conversations she has had in her “neighborhood diner” near Grand Central Station. In fact, she said, average New Yorkers were so worried about congestion pricing that they would be lining up to praise her decision. “I encourage you to come to the next diner with me, I’ll probably be there Monday morning,” Hochul told one reporter. “Sit with me, and watch the people come over and thank me.”

Where’s the money?

Hochul said that there was no urgent need to find a new revenue stream. “When you think about it, the revenues from congestion pricing would not really accrue until much later,” the governor said. “A year from now, we'd be looking at the money that was expected. So that's why we don't need to take immediate action.” 

But the MTA’s current capital plan relies on the existence of a consistent new revenue stream that the authority can bond against. Until that revenue stream is found, it will not have the necessary funds for any number of crucial projects and improvements.

“The MTA cannot award contracts that do not have a committed, identified funding source. Until there is a commitment for funding the balance of the 2020-2024 Capital Program, the MTA will need to reorganize the Program to prioritize the most basic and urgent needs,” the MTA said in a statement. “As such, the MTA Board will be evaluating what changes need to be made to the Capital Program in the lead-up to this month’s Board meeting. Modernization and improvement projects like electric buses, accessible (ADA) stations and new signals will likely need to be deprioritized to protect and preserve the basic operation and functionality of this 100+ year old system.”

The governor said that it was still early in the process but she and legislative leaders were committed to finding a new source of revenue for the MTA – though she didn’t say what that would be.

“What I needed to emerge from these last couple of days, which I have secured, is the commitment of the leaders to make sure we can replace that (funding) with a different funding source,” Hochul said. “There are many, many ways to identify that. We're not prepared to say it right now, but those conversations literally started this week. Later today, probably later tonight, they will go on.” 

State Senate Majority Leader Andrea Stewart-Cousins told reporters on Friday that it was unlikely that lawmakers would find a funding vehicle in the last few hours of the legislative session. 

“I don't see that at this point today,” Stewart-Cousins said. “We are extremely committed to funding the MTA just as we are committed to mitigating congestion, and we're trying to find a way forward so as of now, I don't believe that's what's happening.” 

Hochul’s first two proposals for new revenue streams – a payroll mobility tax increase and an “IOU” bill that would promise to inject $1 billion into the transit authority in lieu of congestion pricing toll revenue – were both rejected by state lawmakers. In the end, the Legislature was not able to come up with a funding solution before the session ended on Friday night.

Celebrations and confusion

Lawmakers who support congestion pricing opposed the governor’s attempts to find a replacement funding source in hopes it would force a restart of the program, and they celebrated the governor’s failure to force the Legislature to come up with a solution to a problem that she herself had created. 

State Senate Deputy Majority Leader Michael Gianaris, who came out publicly against Hochul’s plan on Friday, said that her request that lawmakers find new revenue for the MTA within 48 hours was “irresponsible and inconsistent with principles of good governance.”

Assembly Member Zohran Mamdani said that the MTA board should defy the governor and institute congestion pricing on June 30. “Congestion pricing is mandated by law, and a pre-recorded speech from the governor does not change that fact,” he said in a statement. “Legislators refused to sign our names by the governor’s decision, and the MTA Board must now do the same”

Danny Pearlstein, policy and communications director of Riders Alliance, said that he was puzzled by both the governor’s messaging and her apparent political strategy. 

“I don’t know if her entire communications staff resigned in the past 72 hours but it’s unclear how they could have come up (with this) after she came out of seclusion to give these remarks,” Pearlstein said, adding that the governor appeared to assume that she had more pull in the Legislature than she actually did.

Pearlstein said that Riders Alliance, which rallied in Albany on Friday against the governor’s delay to congestion pricing, has built a broad base of support for congestion pricing over the years, including in the state Legislature. 

“I think she thought she was in the old Albany that was famous for kicking the can down the road and this generation of lawmakers are not willing to do that,” Pearlstein said. “But even more than that, her course of action really supports the fallacy of issue polling. Congestion pricing has always polled poorly before it’s been implemented because anybody, when confronted with the idea of a new fee for something, would rather not pay it than pay it.”

Not everyone was pushing back against Hochul’s about-face. A deliberate campaign of support from lawmakers, mostly from the outer boroughs and suburbs, trickled out this week. Bronx Assembly Member Kenny Burgos said that, like everyone else, he isn’t sure how the MTA will get its money but maintaining affordability for New Yorkers was worth the challenge of a delayed congestion pricing rollout. 

“My hope and expectation is that we do find that billion dollars as a recurring amount so we can bond out because I do want to see capital projects,” said Burgos. “I have capital projects in my district, just like many lawmakers have throughout all their districts, but again five years later congestion pricing has been a loaded favor.”

Like Stewart-Cousins, he conceded that the handful of days lawmakers had to find a solution wasn’t ideal. However, Burgos said the stakes were too high to second guess the delay after the fact. 

“Hindsight is always 20/20,” he said. “We can always do things better, execution is, I guess, subjective to how we look at it. The reality is congestion pricing hadn't started yet so she was able to stop it before it began.”