Having survived years of legal battles and political wrangling, New York City’s controversial congestion pricing plan officially took effect on January 5th, 2025. Now, drivers entering Manhattan’s bustling business district south of 60th Street must pay a hefty 9 dollar toll. This article will explain why congestion pricing is more than just an everyday hassle — it’s a microcosm of a bigger issue.
First proposed by then-Mayor Michael Bloomberg in 2007 and eventually adopted by current Governor Kathy Hochul, the congestion pricing plan is intended to reduce traffic and raise revenue for the Metropolitan Transportation Authority (MTA) by encouraging commuters to take the subway. Herein lies the folly of the city’s alleged intentions.
Proponents of congestion pricing have campaigned around New York’s gridlocked traffic and endless commuting times. And they’re not wrong. Traffic congestion remains a growing problem, especially in Manhattan, where in certain areas, a vehicle’s average velocity is approaching walking speeds. Yet, the primary driver behind the implementation of congestion pricing lies not with the city’s traffic, unpleasant though it may be, but with the MTA’s desperate need for funding. Kathryn Freed, a retired New York State Supreme Court justice, claims the plan “was about money, it wasn’t about congestion.” Before his tenure ended, former Governor Andrew Cuomo began drafting a plan to patch the MTA’s growing budget deficit, stating, “We have to pass a dedicated funding stream so the MTA has the funding it needs. Congestion pricing is the only alternative.”
While money remains the heart of the congestion pricing strategy, Governor Hochul’s administration focused its campaigning on congestion and slow ride times, knowing that doing so would help New Yorkers swallow the congestion pricing pill more smoothly.
The MTA currently has an annual deficit of over $8 billion and projects this figure to remain constant in the following years. This comes even after the city received $26.5 billion in federal Covid relief funding. Part of this is due to declining ridership, an issue most mass transit systems nationwide have faced since the pandemic. However, the MTA’s budget problems predate the Covid lockdowns, owing to generous union contracts that inflate wages and hinder efficiency. For instance, a “telephone maintainer” makes $43.72 per hour and receives a “platinum” health care plan, while a “track supervisor” on the Metro-North could bring in $500,000 yearly. Additionally, turnstile jumping (practically an official New York City sport) costs the MTA hundreds of millions of dollars annually.
The MTA’s congestion pricing scheme is nothing more than a band-aid for its own financial inefficiencies, forcing hardworking, cash-strapped New Yorkers to face the brunt of its mismanagement. While traffic has eased slightly since its initiation, the toll remains an unavoidable tax on daily life. For those who can take the Subway, it represents an inconvenient trade-off to avoiding a costly tax.
Despite its hefty deficit, the MTA approved a 68 billion dollar capital plan to improve its existing systems. The subway is undoubtedly in need of repair and renovation. Railcars and power systems have been neglected for decades, and replacement parts are so outdated they can only be found on eBay. But now is certainly not the time to approve a complete transit makeover that will cost more than eight times the MTA’s annual deficit.
Congestion pricing will bring in only $500-800 million a year for the MTA—a drop in the bucket compared to what’s needed to fund the capital plan or make a meaningful dent in its deficit. Governor Hochul has repeatedly assured New Yorkers that she would not raise taxes. Yet, with no other funding streams in sight, higher taxes or a new fee system seems inevitable.
Tax initiatives like the congestion pricing plan make a notoriously unaffordable city even more unaffordable. No wonder New York City is among the fastest-contracting cities in all of America. If the population continues on its current downward trajectory, the MTA’s financial woes will only worsen.
Fixing New York’s public transit system, both literally and financially, is by no means a trivial matter. But in the short term, there are certain areas in which the MTA can improve. First, the MTA must cut costs. Unnecessary expenses, like its generous union contracts, will cause the transit authority to continue to suffer financially. Additionally, getting rid of revenue blackholes like fare evasion and pausing major spending projects will help put the MTA on track to reach financial equilibrium. Congestion pricing and other tax plans should be a last resort, not the first place the MTA looks when its books start bleeding red.
