The Daily - The Rise and Fall of Congestion Pricing in New York

Episode Date: June 10, 2024

On Wednesday, Gov. Kathy Hochul of New York announced that she was indefinitely halting a project that had been decades in the making: congestion pricing in Manhattan’s core business district.Ana Ley, who covers mass transit in New York City, and Grace Ashford, who covers politics in New York, discuss why New York hit the brakes on congestion pricing.Guest: Ana Ley, who covers mass transit in New York City for The New York Times.Grace Ashford, a reporter covering New York government and politics for The New York Times.Background reading: How Ms. Hochul decided to kill congestion pricing in New York.Is New York’s Economy too fragile for congestion pricing? Many say no.How would congestion pricing have worked in New York City?For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

Daily producer Will Reed here in New York. It's about 8.50. And I'm on my way to meet Michael Barbaro. And, oh, there he is. Welcome to the neighborhood. Thank you. It's beautiful here. It is. So, where are we going?

We are going to my car. I confess I have a car in Brooklyn. And we're going to use it to commute into Manhattan, which is not a thing I normally do via car. But there's a journalistic rationale, which we will get to. You're going to sit here. Okay, I'm going to open the windows, just get a little air in here. Okay, I'm going to open the windows, just get a little air in here. So Michael, why are we driving into New York today?

We are driving into Manhattan in order to study, observe, lay eyes on what was supposed to be this first inin-the-nation tolling system for cars entering a downtown. It's an anti-traffic program that says if you want to be part of traffic, then you have to pay for it. It's been in the works for years. So we're just going to go basically do a dry run through the infrastructure of this tolling system, known as congestion pricing.

We're now on a ramp taking us off the FDR at East 61st Street. So we are one block north of the congestion pricing zone. So we're going to go straight up. There's the cameras. Oh, you see them, yeah. We are seeing the tolls. And in fact, I'm just gonna slow down. And there's three in a row.

These are, I don't know, three feet by four feet, four by four metal boxes with lights and glass and cameras inside. They're kind of in the trees on a big metal post. I feel like we're under the UFO right now. We were under the UFO waiting for it to open and something to emerge and this is congestion pricing. This is the system. These cars behind us are like, what the heck are you doing? This is journalism, my friends. The bus has every right to be mad at us.

All right, all right, all right. Tough city. We are now in the congestion pricing zone. And the goal is that this typically very congested neighborhood of Manhattan, which you can just, I mean, just look at all these cars, right? The idea is that you slice some percentage of these cars out of the equation. And we should say the reason why we are stopping in the middle of York Avenue and looking at this tolling system is because we just learned that the

governor of Newark, Kathy Hochul, is putting an indefinite pause on this system. And if that pause turns into what I suspect is a forever pause on this thing, none of these cameras will ever be operational. And this system will just become a relic. And the story of how New York got to a point where all of these cameras and tools and infrastructure were installed, and now at the very last minute, the plug is being pulled on this system is a complicated story that I think is worth untangling. Cue the theme song. From The New York Times, I'm Michael Barbaro. This is The Daily. Today, the rise and fall of congestion pricing in New York City.

I spoke with my colleagues, Anna Lay and Grace Ashford. It's Monday, June 10th. Well, Ana, welcome to The Daily. Thank you. You cover transportation in New York City for The Times. transportation in New York City for the times. I want to start with the question of how and why congestion pricing was ever going to come to New York in the first place. Yeah. So for a long time, New York City was really wrestling with the problem of traffic in Manhattan. It's one of the most congested places in the country. So for more than 50 years, is in the country. So for more than 50 years, there's been this idea that people have talked about charging people to drive into this part of the city to pay for the privilege of getting to

reach some of the most famous destinations and neighborhoods in New York City, Soho, Chelsea, Hell's Kitchen, Wall Street, Times Square, the theater district, that there should be a fee if you're going to bring a car into this place that you could very easily reach via public transit. And there are other big cities that have congestion pricing, like London and Singapore and Stockholm. And for people who think that this is a good idea, and Singapore and Stockholm. And for people who think that this is a good idea, New York just seemed like a really good setting to experiment with it in the United States

because it's so walkable. We have great access to the subway. We've got buses. We've got commuter rail lines. There's alternatives to a car, thus potentially an ideal place to ask people to get out of their cars. Right. Yeah. And so to bring this concept to the United States, New York City is the place where

it's going to happen. It's either going to happen here or it's not going to happen anywhere in the country. And what exactly is the logic of making people pay for the privilege? What is it supposed to do? It's supposed to discourage you from driving in at all. It's supposed to encourage you to take mass transit, and it serves a greater good for people not only in their ability to get around, but also in having a more enjoyable place to live and a cleaner place to live. Fewer cars, less air pollution, the thinking has always been a more pleasant city. Exactly. Okay. You said this idea has been kind of kicking around.

Why doesn't it, in New York, seem to go anywhere? Well, there are a lot of people who don't want to pay. A lot of people in boroughs outside of Manhattan, people in New Jersey, in Connecticut. And so there's been a lot of resistance over the years. And politicians sometimes propose it and then just back away because it's not popular. And when does that start to change? I think 2017 was a big turning point.

Chaos deep underground. A subway train derailing, violently tossing people to the floor. Service in the New York City subway just gets unbearable. Just weeks ago, panicked passengers trapped on another broken down subway train over an hour. No air conditioning. There are all kinds of delays and service disruptions. It's another day, another meltdown on the subway. With these breakdowns becoming an almost daily occurrence, many passengers tell us they've simply had enough. And people are just so frustrated they can't get to where they need to go.

For F's sake, the New York Post wrote, fix the subways. In New York, it's known as the summer of hell for commuters. Governor Cuomo, under pressure to fix the transit mess, now making headlines by calling congestion pricing an idea whose time has come. So the governor at the time, Andrew Cuomo, has this very clever idea to use congestion pricing money to pay for the repairs that are needed in the subway. Hmm. And I guess we should explain to listeners. Hmm. And I guess we should explain to listeners, in New York, the subways, which are all in New York City, are paid for by the state.

Right. And lawmakers around the state realize, oh, this is a way to address this nuisance that we've been having to deal with for so long that takes care of something that they keep putting off sort of, you know, budget cycle after budget cycle. Right. You're saying around this time, all those people in the state government start to look at the subway mess and see this is something they just don't want to have to keep dealing with. And suddenly congestion pricing, which had been something they all looked askance at as something that might piss off their constituents, suddenly looks like not such a bad idea anymore. Exactly, yeah. So at this point, there seems to be a really clean solution in front of them. So once Governor Cuomo and the state legislature starts to get a little excited about this idea, what is the actual operational plan that takes form? So the idea is to make a zone where the tolls are in effect. So in this case, the zone is anything south of 60th Street, which is a part of Manhattan that is just constantly choked with traffic.

This is, you know, cars, delivery vans, Ubers, Lyfts, ambulances. I mean, any type of vehicle you can think of is there. And this program would toll those vehicles for coming into the zone or for getting around the zone. And those tolls range depending on how big the vehicle is and what time of day it is. And the most expensive would be for big trucks. And at peak hours, when the tolls are most expensive, those trucks would pay $36. A car like you and I might drive, those would cost $15. Taxis and Ubers and Lyfts are different. There would be a fee that's tacked on for the passenger.

are different, there would be a fee that's tacked on for the passenger. Taxis would pay $1.25, and Ubers and Lyfts would pay $2.50 per trip within the zone. Those passenger fees for getting in a taxi don't sound like a ton of money for each person who gets into a cab, but the $15 for passenger cars and the $36 for a commercial truck, that's real money. And I'm just doing the math. If you commuted into the city even just three days a week in a passenger car, that's $45 a week. So what was the thinking behind those numbers? Well, they don't want you to drive into the zone. That's the whole point.

Right. So it's meant to be high. It's meant to contain a kind of sticker shock. It's meant to be high. It's meant to contain a kind of sticker shock. Exactly. I'm curious, because this is about raising money for the subways, just how much money does this proposed set of tolls raise? It's supposed to raise a billion dollars annually, which is money that can be used for all kinds of things within the subway system to make it run better. And it would mean that the subways would have that money forever without having to go to the state and ask for money so that they could do these repairs.

Right. But there are many other benefits that advocates for the program have pointed to, including the fact that it could reduce traffic by 17 percent in the zone. It would also mean that buses would be able to travel more quickly. And New York City has the slowest buses in the nation. I mean, in some cases, you can walk more quickly than if you were to take a bus somewhere. Right. Shocking. Yeah. And so that would be a huge improvement to the transit network. And finally, this would save the region billions of dollars that it loses to people just sitting in traffic all day, idling.

Because if you're sitting in your car idling, you're not working. Deliveries aren't being delivered. Right. It hurts the economy, is the thinking. Yeah, and that's why this plan had a lot of support from transit advocates, from business community leaders in New York City, and from plenty of regular New Yorkers who don't own cars and they rely on the subways and the buses to get around the city. I'm curious who ends up opposing this plan once it seems like the state's government is starting to get behind it. Well, a lot of state lawmakers really like the idea of dedicated money

for the subways that congestion pricing would bring, but it's not something that a lot of state lawmakers really like the idea of dedicated money for the subways that congestion pricing would bring. But it's not something that a lot of their constituents who live outside of the city care very much about. Congestion pricing to a lot of people still look like a tax on commuting into Manhattan, which is kind of this elitist idea that people consider to be anti-car. And it was a change. It was something unknown, and people don't tend to like that. So the same forces that had made this plan so unpopular for the past 50-plus years were still very much in full force. You could see that in the political realm and in the courts, that idea really started to build. You know, right now there are eight lawsuits against congestion pricing.

One of them is from the Staten Island Borough President, who says his constituents just don't want to pay to come into the zone. New Jersey's also suing. The teachers' union is suing. Yeah. And what's the basis, the legal basis for most of these lawsuits? Well, the city's teachers are suing because, for example, a lot of them drive into Manhattan every day to work at the schools, and basically they don't think it's fair to pay these tolls.

They say it would be a financial hardship to them. Others are challenging it because they're concerned that they could see more pollution or more traffic in their neighborhoods if people start driving around the zone to get away from the tolls. I'm curious what your reporting tells us about who would actually pay the congestion toll based on the history of who actually goes into this zone. What we found is that people entering the zone are mostly pretty well off. Just to give you a sense of that, a data company that we worked with called Replica crunched some numbers for us. And

what they found was that the average income of people that drive into the zone is around $181,000. Got it. And people who make less than $50,000 who have to commute into the zone are very few. It's 1% of the people that go into the zone. So what that tells you is that most of the people commuting into the zone can probably afford this toll. Right. If they want to drive.

Right. And yet there's still clearly a lot of vocal opposition as well as legal opposition. Does any of this opposition gain much traction? Not really. I mean, the court cases are still pending, but their support at the highest level of state government. Governor Cuomo, the original champion of this plan, ends up resigning. But his successor, Kathy Hochul, is equally supportive. So the momentum for congestion pricing just keeps building. So the momentum for congestion pricing just keeps building.

Well, that controversial congestion pricing plan for New York City is a go. Today, getting the official green light from the Metropolitan Transportation Authority Board. The MTA board took a vote today. Strongly, yes. This is a true victory for our city and for our region. The motion is approved. And before long, there's a date. Starting Sunday, June 30th at midnight, drivers that need to go south of 60th in Manhattan will be slapped with a new toll.

The system is in place. The cameras and the sensors are up. Just over nine weeks until the MTA's cameras, including these here at 61st and 11th, will begin scanning license plates. There are informational sessions. There's a website where people can go. And everything is ready to go. Right. This was fate accomplished. This was an inevitable and very big change in the lives of anyone who drives into Manhattan. And then the last person anyone could have expected to stop this thing from moving forward,

Governor of New York, Kathy Hochul, the biggest champion of this thing, decides she is pulling the plug on congestion pricing. she is pulling the plug on congestion pricing. After the break, Grace Ashford on why the governor turned against congestion pricing. We'll be right back. Grace, you've been covering Governor Hochul's decision-making in the saga of congestion pricing. And as Ana just said, the reason this was all so surprising

was that Governor Hochul had been a supporter of congestion pricing. So tell us how the governor originally talked about this idea. So even though this congestion pricing plan begins before Kathy Hochul takes office, she immediately steps in and embraces it. From time to time, leaders are called upon to envision a better future. And we see this as recently as December of 2023, when she headlines this rally in support of congestion pricing. And she announces, you know, not only that she supports it.

Be bold in the implementation and execution and be undaunted by the opposition. But that this is what it looks like to be a leader. That's how you secure progress. And I think this really fits into a larger kind of frame of what Kathy Hochul sees herself as the kind of leader that makes tough decisions that are not always popular. People love New York City, but it's facing some hard times. And in this rally, she goes on to list all of the many, many benefits that congestion

pricing is projected to bring. Anybody sick and tired of gridlock in New York City? She talks about how it's going to unclog city streets. Anybody want cleaner air for our kids and for future generations? And how it's going to make the air in the city better to breathe. Anybody think we deserve better transit, especially those who live and work here? And crucially, how it's going to bring this really critical funding stream to the city's subways and buses. Well, then you love congestion pricing, right?

Yes! So, there's really no ambiguity here about how the governor is thinking about congestion pricing just a few months ago. As of December, there was no ambiguity. And then, of course, we get to last week's pretty remarkable flip-flop by the governor. That's right.

My colleague Dana Rubenstein and I, as well as some other reporters, had begun to hear rumors that the governor might be considering backtracking. And so we began reporting this out. Then all of a sudden, we get this announcement that she is going to be addressing New Yorkers in the form of a pre-taped speech on Wednesday. First and foremost, I understand the financial pressures you're facing. And she tells New Yorkers that she's thinking really hard about the economy. Over the last five years, New Yorkers have seen the price of groceries alone go up an average of

23 percent. She's thinking about the cost of housing. Housing prices have increased by 17 percent. And she is thinking about New York City even more broadly. Anyone walking through midtown Manhattan or riding the subway, they've seen it. Office attendance is down compared to before the pandemic, with many workers only commuting in two or three days a week. And she talks about how the vacancy rate for commercial buildings in Manhattan is at 20%. The idea behind congestion pricing is that it'll encourage many current drivers to shift to public transit. But there is a third possibility that now poses a greater threat than it did at the program's inception.

Drivers can now choose to stay home altogether. And she says for all of these reasons, she doesn't think it's right to add another burden on New Yorkers. I have come to the difficult decision that implementing the planned congestion pricing system risks too many unintended consequences for New Yorkers at this time. For that reason, I have directed the MTA to indefinitely pause the program. She's decided to delay congestion pricing indefinitely. So in her telling, this is purely an economic decision. Congestion pricing, she's saying, is an existential risk to New York's economy. That's right.

She sees New York as still too fragile to take this big step at this moment. There would seem to be a meaningful hole in this explanation from Governor Hochul, which is that six months ago, when she gave that full-throated support for congestion pricing, the city's economy was pretty much the same as it is right now. I think by some measures, the city's economy has actually only gotten better over the past six months, which leaves many people not entirely sure that this is a full explanation for why the governor has decided to stop congestion pricing from going into effect. Well, there is another factor that a lot of people have pointed out

looms pretty large in the mind of New York Democrats. And that's the election that's coming up this November. I think in order to understand this, you have to go back to the 2022 midterm elections, when you have all of these congressional races and Governor Kathy Hochul herself on the ballot. She very, very narrowly won that race, but a lot of Democrats down the ballot lost. Right. And I think that was a shock to a lot of people because New York is a blue state, but suddenly there seemed to be a kind of red wave, especially in those congressional seats. That is exactly what Republicans were cheering that, in fact, there was a red wave in New York, and that red wave helped them to capture

control of the House of Representatives. And I think in the kind of post-election analysis, one thing that became very clear was just how successful Republicans were in that race at deploying these concerns about crime, which was really powerful, particularly in the suburbs where Democrats saw some of their worst losses. And on its face, crime in New York City in 2022 and congestion pricing in 2024 are very different issues. But there is this one kind of similarity, and that is that both of these issues are tremendously important to suburban voters who have become really, really crucial for Democrats.

Got it. Let me just make some sense of this. This is kind of fascinating. After losing a bunch of congressional races in New York on the issue of crime among suburban voters outside New York City, Democrats look to this fall's races and say to themselves, huh, congestion pricing looks like a new version of crime in the sense that it pisses off

suburban voters who are, let's be honest, in some cases, commuters coming into New York who might not want to pay these congestion pricing fees. And they think to themselves, we might recreate that exact same dynamic this time around. Yeah. And I think it's just really important to remember that while congestion pricing has a lot of support in New York City, it's been pretty consistently opposed outside, particularly in the suburbs, where we have up to 70 percent of New Yorkers opposing this plan. And what I think Governor Hochul would say is that this is the reality that she is responding to, that there are a lot of regular people, regular New Yorkers, who have really serious concerns.

of regular people, regular New Yorkers, who have really serious concerns. Okay, so by that political logic, Hochul seems to have decided that the risks of pushing congestion pricing right now in these months before the election, knowing that it could endanger Democratic control of Congress potentially, on top of her economic worries about New York City's recovery and how congestion pricing puts it at risk, that taken together, those risks outweigh congestion pricing's chief benefit, which is it's raising a ton of money for New York City's subway and transportation system. That's right. And in fact, I think, you know, having spoken with some of her advisors and associates, she would say that in December, she believed that it took leadership and courage to stand up and support this policy. It also takes leadership and courage to stand up now and say,

this is not the right time. We have to pause. Okay, well, this all makes me wonder, Grace, what happens to the money that congestion pricing was supposed to have raised that's now gone poof, right? A billion dollars to fund New York City's aging and at times melting down subway system. What is the governor going to do to find $1 billion that congestion pricing was supposed to produce that it now won't?

This is the billion-dollar question. Initially, she had proposed maybe raising the payroll tax on New York City businesses to help make up this shortfall. This would be a tax that would only go on businesses operating in New York City. But wouldn't that just hurt New York City businesses, which she said are vulnerable in their economic recovery? Wasn't that her explanation for getting rid of congestion pricing in the first place? And this is exactly the point that was made by many New York lawmakers and the business community, who basically said, you know, this isn't fair. Why are we solely

bearing this burden? You know, whereas congestion pricing, everyone who is driving into New York City is actually going to help pay for less congested streets. As of Friday, this proposal is dead in the state legislature. But this leaves this big question of, so what next? You know, late on Thursday night, there was this idea floating around to just agree to do something that would generate a billion dollars, like a big, you know, billion dollar IOU. That also appears to maybe not have the support it needs to pass, raising the possibility that actually lawmakers could leave Albany and this legislative session without doing anything to plug this hole. Grace, the governor is calling this a temporary pause or an indefinite

pause, but I think to many people's ears, that sounds like a permanent pause. And if we're being blunt, I wonder if the reality here is that congestion pricing in New York City is now dead, and if it's dead in New York City, is it ever going to have a shot to come to the U.S. at all? Privately, we're hearing that the governor is telling people that she really does believe in this policy, that it's just the wrong time. But I also think it's important to pay attention to this word indefinite. I think at minimum, it suggests that this is not going to be a brief pause. And I think if you look at the path that congestion pricing has already taken in New York, this has been decades in the making. Studies and planning and

money and all of that has gone into building this momentum. And in an instant on Wednesday, all of that was taken away. And I think for people who really supported congestion pricing, they'd always sort of known that there was going to be this moment of opposition. You look at other cities across the world that have implemented this, you can track that right before a policy like this is put into place, people get panicked. And, you know, it takes a little while for them to get used to it as just sort of a regular state of affairs. But a lot of these studies say, eventually people do get used to it. New York really was positioned to lead as an example of what congestion pricing could be. But I think this decision has a lot of proponents really concerned that if New York isn't able to implement this policy, what other city will? millions and millions of dollars of cameras and detectors that have been installed all across

the congestion zone in Manhattan to make this system work. They were supposed to flip a switch and they were going to go on June 30th. What happens to them? What happens to all that money now? It's a really great question. I've heard some people say, we already have the infrastructure up. Why don't you just take it out for a test drive, tax people a dollar to drive into the business district and kind of let them get used to that. As far as I know, that idea has no legs. What it does seem like is that on June 30th, New Yorkers will be able to drive their cars wherever they want in Manhattan. And they'll also be able to look up at this very visible reminder of what New York almost did. Well, Grace, thank you very much. We appreciate it. Thanks so much, Michael.

much. We appreciate it. Thanks so much, Michael. Over the weekend, New York state lawmakers ended their legislative session without a plan to replace the $1 billion a year in funding that congestion pricing was supposed to raise. As a result, plans to upgrade the city's century-old subway system are now in doubt. We'll be right back. Here's what else you need to know today. An audacious raid by the Israeli military over the weekend rescued four Israeli hostages in Gaza who had been held there by Hamas since October 7

and reunited them with their families. But according to officials in Gaza, the raid killed and wounded scores of Palestinians. A spokesman for Hamas said that in response, the group would take punitive measures against remaining Israeli hostages in Gaza. Meanwhile, a prominent member of Israel's war cabinet, Benny Gantz, quit on Sunday in protest of the government's handling of the war in Gaza. Gantz had set this weekend as a deadline for Israel's prime minister to outline a plan to bring the war to an end.

No such plan has been outlined, prompting Gantz to resign. Today's episode was produced by Will Reed, Nina Feldman, Stella Tan, Aastha Chaturvedi, and Rochelle Banja. It was edited by Patricia Willans, contains original music by Alisha Baitu, Dan Powell, and Rowan Misto, and was engineered by Alyssa Moxley.

Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for The Daily. I'm Michael Bilbor. See you tomorrow.