Gov. Kathy Hochul hit the brakes on New York’s decades-in-the-making congestion pricing plan on Wednesday, shocking lawmakers and infuriating supporters of the initiative.
The plan would have raised as much as $1 billion per year, according to estimates by the transit authority, for the city’s crisis-plagued mass transit system by charging motorists to enter Manhattan’s central business district.
The plan was supposed to go into effect on June 30, but now it has been “indefinitely paused,” Ms. Hochul said.
So what happens next?
The board of the Metropolitan Transportation Authority must vote
The idea to congestion price in New York was first conceived in 1952 but a plan was not approved until 2019. To halt its implementation, Ms. Hochul needs the approval of the 23-member board of the Metropolitan Transportation Authority, which oversees public transit in New York City and much of its suburbs. The board’s voting members are nominated by the governor, with others recommended by the mayor of New York City and the executives of the region’s suburban counties.
The M.T.A. had already earmarked $15 billion that it expected to fund with congestion pricing for long-planned projects critical to the upkeep of the subway, which has slid into decrepitude compared with the systems of other large global cities.
It is not clear when such a vote is expected to take place, how the board will vote or what the M.T.A. will do about a roughly $500 million contract that it had already signed for equipment needed to put the congestion pricing plan in place. The next regularly scheduled M.T.A. board meeting is June 24, just six days before the plan was scheduled to go into effect.
Where will money for the subway come from now?
The unexpected pause of congestion pricing creates a sudden crater in the finances of the M.T.A. Congestion pricing was expected to be the single largest source of funding for the agency’s $51.5 billion capital program, accounting for nearly 30 percent of the total.
Making up for that lost revenue will be difficult. In the short term, Ms. Hochul could try to fill it with money from the state reserves, but she is said to be looking at a more durable revenue source, in the form of a tax on city businesses.
But that raises another problem: Levying a new tax on city businesses would require the approval of the State Legislature, whose session ends this week. That means if a new tax is not approved by the end of this week, there is no clear timeline for doing so.
What happens to all the congestion pricing equipment?
The suspension of congestion pricing will leave New York City with a great deal of expensive equipment for which it now has no use.
In preparation for the rollout, the M.T.A. signed a contract with a Nashville-based company to install equipment related to the plan across Manhattan at a cost of more than $500 million.
That equipment included E-Z Pass readers and overhead structures called gantries, which would have monitored which cars were entering the congestion pricing zone and billed drivers accordingly. The governor’s about-face on congestion pricing means none of that equipment is now needed.
It is not clear what will happen to any of that equipment, or to the $500 million contract signed by the authority.
Transit advocates and elected officials say they will keep fighting
Advocates held a rally on Wednesday to condemn Ms. Hochul’s announcement, and some vowed to keep fighting to bring congestion pricing to the city.
“We are very upset,” said Antonio Reynoso, the Brooklyn borough president, before speaking directly to the governor: “Be strong. Have conviction, we will have your back.”
Olivia Bensimon contributed reporting.
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