MTA board approves updated congestion pricing plan

Bloomberg News

The Metropolitan Transportation Authority Board voted once again to implement congestion pricing, the tolling program budgeted to cover $15 billion of its current capital plan, but with toll fees lower than the original plan. 

The board also expressed optimism since Gov. Kathy Hochul pledged to fully support its next capital plan. But enemies of congestion pricing are just as opposed as ever. 

The tolls will start at 40% of what the MTA originally planned, increase to 80% after three years, then the full $15 toll in 2031. It will take longer for this toll to generate the necessary revenue for the MTA's 2020-2024 capital program, MTA Chair Janno Lieber said, but the agency is satisfied.

"The only reason that we can absorb the timing impact of having the lower toll — which will mean that our full bonding that gets us to the $15 billion is probably delayed a little bit — is because we have a full and absolute commitment on the next MTA capital program," Lieber said.

The original tolling structure, approved by the board in March, would have charged $15 for passenger vehicles to enter Manhattan's Central Business District at peak hours.

Hochul halted that plan in June, weeks before the program was set to begin, claiming she was concerned the costs were too high. She announced last week she would let the plan take effect with a $9 base toll, starting January 5. All but one board member approved the plan.

The lower tolls will mean rearranging the bonding plan, MTA CFO Kevin Willens said. In the original plan, the MTA was planning to issue bonds around a year after the tolls began being collected. 

"The strategy during the phase-in period is to time our bonding," Willens said, "not only for the initial one year, but also as the revenue is ramping up, to issue the bonds as we need the cash for the projects and what the revenue stream can support."

MTA Construction and Development President Jamie Torres-Springer gave a presentation on the construction projects the MTA can restart with the congestion pricing revenue. 

The agency is reactivating canceled contracts, restarting the procurement process for many construction projects and purchasing new rolling stock; for instance, it plans to order more than 250 electric buses by the end of the year. 

Meanwhile, opponents of congestion pricing are again looking for ways to stop it. 

The MTA and Hochul timed the program to take effect before President-elect Donald Trump is inaugurated, so he won't be able to rescind federal approval. 

Trump released a statement on Thursday calling congestion pricing "a massive tax to people coming in" to the city, and "extremely inconvenient from both driving and personal bookkeeping standards." 

New York Republican lawmakers are exploring whether Congress could pass laws to stop congestion pricing. And they're still looking for other avenues Trump could use, such as withholding federal funds. 

Some of the lawsuits against the policy are still ongoing. New Jersey Gov. Phil Murphy, who is backing one of the federal lawsuits, said he "will continue the fight to block this plan in court."

The board heard some other positive news at its meeting: its projected out-year budget gaps have decreased since its July meeting. 

The agency has reforecast since July, and now predicts an operating budget gap of $378 million in 2027 and $419 million in 2028 — around $50 million lower than in the July financial plan. 

The problems causing the budget shortfalls are the same: lower than expected revenue from buses, subways and real estate tax revenue. But revenue from other sources, especially commuter rail, has grown far beyond the MTA's expectations.