Governor Kathy Hochul has officially lifted her five-month suspension over New York City’s congestion pricing initiative. Fresh tolls will commence on January 5, 2025. The scheme aims to raise $15 billion for vital transit upgrades. It proposes to impose charges on motorists who drive into Manhattan south of 60th Street except for those using the West Side Highway, FDR Drive, or Battery Park Underpass.
Hochul had halted the program in June, citing concerns about its original toll structure. The initial daytime toll of $15, set to take effect last summer, has now been adjusted to a more commuter-friendly $9 base rate.
“I’m proud to announce we have found a path to fund the MTA, reduce congestion and keep millions of dollars in the pockets of our commuters,” Hochul said. The revised toll represents a 40% reduction from the initial plan.
A New Toll Structure
The cost bracket depends on factors such as the vehicle category, mode of payment, and time of the day. For instance, during the high concentration areas of passenger cars and trucks, which are from 5.00 am to 9.00 pm on the weekdays and from 9.00 am to 9.00 pm on weekends, regular passenger cars with the E-ZPass will be billed $9 but without E-ZPass will be charged $13.50. For passenger vehicles, the overnight tolls have been reduced to $2.25 for E-ZPass users instead of the typical $3.75 charge.
Commercial and larger vehicles face higher fees. For example, multi-unit trucks will pay $21.60 during peak times, a decrease from $36 under the prior plan. Motorcyclists with E-ZPass can expect a peak toll of $4.50.
The tolls aim to encourage off-peak deliveries by significantly reducing overnight rates for commercial traffic. Additional surcharges apply for app-based rideshare services like Uber, Lyft, and traditional taxis.
Discounts and Exemptions
While most drivers will feel the financial impact of congestion pricing, Hochul’s plan offers limited relief for specific groups:
Low-income drivers earning less than $50,000 annually can enroll in a discount program, cutting tolls in half after ten monthly trips. Drivers entering Manhattan via the Lincoln or Holland tunnels will receive a $3 credit during peak hours. Similar discounts apply for other crossings, with the Queens-Midtown and Brooklyn-Battery tunnels offering $1.50 credits for passenger vehicles.
Individuals living in the congestion zone whose annual income is below $60,000 could be eligible for a tax deduction on the tolls charged. Exemptions are still in effect for emergency vehicles, vehicles for the disabled, and school buses.
Funding Transit and Reducing Congestion
The critical objective of the congestion pricing program is to relieve the traffic chaos in the streets of Manhattan and enhance the services offered by public transport. Hochul’s administration estimates a 13.4% reduction in traffic south of Central Park. Toll revenue will fund critical upgrades for the Metropolitan Transportation Authority (MTA).
The $15 billion capital enhancement scheme encompasses revamped subway signaling, the introduction of new electric buses, modern subway coaches, and improved access through more elevators. Part of the funds will also go to the much-awaited expansion of the Second Avenue subway.
Hochul has also asked the MTA to improve service on 23 bus routes outside of Manhattan to provide more frequent runs for commuters moving from vehicles to public transit.
Long-Term Implications
The $9 toll will remain in effect until 2027. Rates could rise later, with a cap of $12 through 2030 and potential increases to $15 or higher beyond that, depending on MTA revenue needs.
The revised toll structure, designed to ease commuters’ financial burden, could extend the MTA’s repayment schedule for the bonds funding the improvements.
Federal Approval and Legal Challenges
The program still requires final approval from the Federal Highway Administration. However, Hochul’s team expects a nod shortly after the MTA board finalizes the toll structure.
Opposition Remains Fierce
Former President Donald Trump has pledged to revoke federal support for the program if he returns to office. Meanwhile, lawsuits from various parties, including New Jersey Governor Phil Murphy, are challenging the tolls’ legality.
Despite these hurdles, Hochul’s administration is determined to implement the program swiftly and ensure its establishment before any potential federal reversals.
