The Journal. - New York’s U-Turn on a Plan to Reduce Traffic

Episode Date: June 11, 2024

The nation’s first congestion-pricing plan was set to take effect at the end of June. But last week, New York Gov. Kathy Hochul called to indefinitely delay the program. WSJ's Jimmy Vielkind unpacks the surprising move and explores why Hochul made the 11th hour change. Further Reading: -New York Gov. Kathy Hochul Abruptly Halts Manhattan Congestion Pricing  Further Listening: -NYC’s Food Delivery Workers Fight for a Minimum Wage  -New York City's 'De Facto Ban' on Airbnb  Learn more about your ad choices. Visit megaphone.fm/adchoices

traffic sucks there's really no other way to put it and in new york city in manhattan it's especially bad you know driving in manhattan is not fun i don't. I don't think it's fun. No. I think that's actually a fact, an objective, provable fact. Yeah, it's not fun. It's basically impossible to go across town, which is to say east-west in the middle of Manhattan. The New York City Department of Transportation and other authorities

kind of do regular surveys of traffic speeds, and they have over time just reduced. That's our colleague Jimmy Veilkind. He says that to fight the traffic, New York officials decided to impose something called congestion pricing. Anyone driving into lower Manhattan would have to pay $15.

The plan was set to go into effect at the end of this month. But at the last minute, New York Governor Kathy Hochul changed her mind and decided to put congestion pricing on hold indefinitely. After years of planning, New York City was finally going to move forward with this congestion pricing plan, which was beloved by urban planners and major pillars of the city. And Governor Kathy Hochul got cold feet. Welcome to The Journal, our show about money, business, and power.

I'm Ryan Knudsen. It's Tuesday, June 11th. Coming up on the show, how a controversial plan to reduce traffic in New York City broke down at the 11th hour. Attention all soccer fans. From Orlando to Los Angeles, take to the fields of the USA for your next vacation. Ready to kick off? Discover exciting games and events. Plus, find amazing hidden gems in cities full of adventures, delicious food, and diverse cultures.

You'll love it so much you'll want to extend your stay beyond the matches. Get the ball rolling on your soccer getaway. Head to visittheusa.com. The idea behind congestion pricing is pretty simple. If you charge drivers to enter areas with lots of traffic, fewer people will do it, and they'll take the bus or the subway instead. And congestion will improve. Congestion pricing sort of has three goals. Goal number one is raise money, and the logical thing to do with raising that money is improve public transit.

Goal number two, bring fewer cars into the central business district, and then the cars that remain will be able to move around more quickly. And that's going to be things like your taxi or your ride hail vehicle. It's going to be something like emergency vehicles, be they ambulances or police cars, or things that just need to have a car like deliveries. And of course, that brings us to goal three, which is by reducing traffic, particularly internal combustion engines, you're going to improve air quality by doing it. Cars off the roads equals fewer vehicle emissions equals cleaner air and a healthier planet. So those were the three goals. Singapore was one of the first places in the world to implement congestion pricing in the 1970s.

London followed suit in 2003. And officials in New York have been thinking about this idea for years. If there was ever a place in the United States where you could do this, it's New York. First of all, Manhattan is an island. So half of the natural boundary for your congestion zone is formed by the East River and the Hudson River. You have the most highly developed public transit system in the United States operating in New York. If there was ever a place to make the case like you don't need your car, this is the place. In 2007, then-Mayor Michael Bloomberg decided to try and make that case. Bloomberg really pushed it. He and his aides made the case publicly for it. They rallied political support for it. They did, which is

often so critical in these kinds of big policies, they did the studies that they used to marshal the arguments. They looked at the potential for the financial implications, the environmental implications, the traffic flow implications of all of these things. But Bloomberg ran into a wall. He found that there was a mass of representatives, particularly New York state representatives, who represented the outer boroughs, Brooklyn, Queens, the Bronx, parts of the city that don't have as good transit access as there is in the core of Manhattan, where there is still a car culture. And basically, Mike Bloomberg's plan crashed on

the shores of the New York State Legislature in Albany in 2008. The idea lay dormant for about a decade, until 2017, when New York's subway system ran into major problems. It was something that was known as the summer of hell. Years of deferred maintenance on the subway system led to just sort of a cascade of delays, and it really became a major issue for subway riders. The Friday evening rush is just getting underway now and already the MTA is reporting delays on the four, the five, the six, the seven,

as well as the J train. And with these breakdowns becoming an almost daily occurrence. I remember this summer, actually. It was a nightmare getting to work on the subway. It created a big issue, but it forced a lot of people to say there's got to be some kind of long-term improvements. We need to upgrade this system,

which started operating in 1904, and it's going to cost a lot of money to do it. New York's governor at the time, Andrew Cuomo, decided to revive the congestion pricing idea. He said he wanted to use the revenue to fund improvements for the subway. Cuomo, in some respects, dusted off the core of Michael Bloomberg's plan for congestion pricing. And frankly, Cuomo was a really, really adept politician who really could play the New York State legislature like a piano. That was something that Michael Bloomberg lacked. And so with Cuomo as the quarterback, this plan, through the opposition and through the same concerns that existed in Bloomberg's time, he was able to wheedle it through the

state legislature and it was approved in the spring of 2019. After years of study and a delay because of the pandemic, congestion pricing was set to go into effect at the end of this month. The plan that was ultimately approved was to charge drivers $15 to enter Manhattan during the day, or for drivers like me on a Vespa, $7.50. The rate was planned to be lower at night, and low-income drivers who live inside the congestion zone could get a tax credit. To charge drivers, officials put up cameras on every entry point

to scan people's plates. So drivers would just drive through. There would be a warning sign telling you you were about to be charged a toll. And then cameras would take down someone's license plate, and you'd get a bill. When Democrat Kathy Hochul succeeded Cuomo as governor, she initially picked up the mantle as one of the plan's chief advocates. So Hochul inherited this program, but she embraced it. And in all the preliminary votes that happened

along the way, Hochul was at the forefront talking about the benefits of congestion pricing. This is never something that Hoko kept at arm's length. Quite the opposite. She took this ball and she ran with it. Anybody sick and tired of gridlock in New York City? Anybody think we deserve better transit, especially those who live and work here? Anyone think that people with disabilities deserve to have more accessibility when they travel through this city?

Yes! Anybody want cleaner air for our kids and for future generations? Yes! Well, then you love congestion pricing, right? So, why did she change her mind? That's after the month. So you get the best deals and low prices on amazing products every month. And did you know PC Optimum members save more? For exclusive offers and

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There's always been opposition in parts of the state and including parts of New York City that are outside the congestion zone and where there is a certain number of residents and voters who drive in and commute. So politicians there have long complained about this program. And they've said that it's a tax where the people paying it have to drive because they say they can't really benefit from transit systems. And then it's difficult as a lifelong New Yorker to think that these people might matter, but there's also New Jersey. And so... Never heard of it. Sorry. New Jersey officials were particularly livid for all the reasons I just mentioned, but also because they had no say in the approval of congestion pricing.

People driving from New Jersey already pay a toll of between $13 to $18 to enter via one of the tunnels and bridges. And so this congestion pricing charge is going to come on top of that toll. After many rallies, after many complaints, the state of New Jersey actually sued the federal government to try and stop the congestion pricing proposal. That lawsuit is still pending in federal court. None of this seemed to deter Hochul, who as recently as last month continued to talk up the plan. When did you first start to hear rumblings that she might be changing her mind?

This happened very, very, very suddenly. New York lawmakers ended their scheduled session last week and I got a call on Monday from someone saying, hey, you know, I heard they might be looking for money for something because they're waffling on congestion pricing, which I thought was interesting. It was a kind of random tip. And then the news came out and many lawmakers told me they were absolutely blindsided by it. What did you think when you heard that Kathy Hochul was going to abandon this plan that had been in the works for so long? I was shocked. I was shocked because she had really identified with this. She had been a staunch advocate of this.

And to have her suddenly, abruptly pull her support was surprising to me. It would have been less surprising for some other officials who have sort of slow walked their support or been a little bit more tepid. But I was absolutely shocked. Does the governor of New York have the power to just say we're not going to do this though? I mean, isn't this technically an agency that's doing this on its own? Yes and no. She has the power in the sense that she appoints many of the members of the MTA's board, including the chairman, Jano Lieber. And so in some ways, it is a agency that operates at the direction of the governor.

In a press conference, Hochul said she was worried about adding an additional toll when people are already dealing with inflation. New Yorkers tell me they're just not ready right now for congestion pricing. And the closer we got to the June 30th implementation date, I heard from more and more anxious New Yorkers that this would be a real hardship for them. Working and middle-class families who can't afford an additional $15 a day toll when they're simply trying to go to their jobs.

So Hochul has said that she changed her mind basically because she's hearing criticism from people in New York City diners. And she mentioned several diners on the east side of Manhattan where she'd heard from patrons about their concerns about congestion pricing. Hochul also said she was worried about hurting downtown Manhattan, which is still struggling to recover after the pandemic. The other thing, though, is politics. So a quick trip back. In 2022, Republicans took the majority

of the House of Representatives. And they did so in part by winning gains in New York, which is a little counterintuitive because we think of New York as this deep blue state. And on a statewide basis, it is. Some of the most competitive congressional elections this November are in districts outside New York City, the same places where people oppose congestion pricing the most. So what we heard from a lot of analysts and again, people who were watching the governor's moves,

was that she didn't want there to be an issue that could be used to attack Democratic candidates. When asked about the political pressure, Hochul has reiterated that her decision was about protecting people's pocketbooks. But people who wanted congestion pricing were not happy. Slower buses, slower trains, that's the Kathy Hochul way. Slower buses, slower trains, that's the Kathy Hochul way. Well, so what does this mean for the MTA, the subway system that was in such need for this money? Ryan, that's a billion dollar question. So the MTA has a big capital plan of all the goodies,

all the things that it wants to get built over the next five years, all the maintenance it wants to do. And transit planners were counting on a billion dollars a year in revenue from congestion pricing. So there's now a hole in the MTA's capital plan, and nobody has any good ideas on how to fill it. In a statement, MTA officials said improvement projects like electric buses, accessible stations, and new signals will have to be, quote,

deprioritized to protect and preserve the basic operation and functionality of this 100-plus year old system. Is this a temporary pause? Is there a chance that this plan comes back again next year or at some point in the future? Or do you think it's dead forever now? I don't think it's dead forever. The state has already spent about $500 million putting up those cameras all around Manhattan. In many ways, they were almost ready to throw the switch and just turn this system on. If you think about the political effects of this, I think it's possible we'll see this get revisited after the November elections. But it's also possible that it does go away forever, or until there's a new governor or a new set of political circumstances to maybe revive it.

What does this mean for New York City and the traffic that sucks so bad? You know, we didn't know exactly what was going to happen when congestion pricing went live. We didn't know what its actual effects would be, whatever all the models and the estimates are. What is it going to mean for New York City? It means the status quo for now. And it means that a lot of the hopes and dreams of urban planners, transit advocates, and many elected officials, at least for now, are set aside. That's all for today. Tuesday, June 11th.

The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.