Untangling the City: Congestion Pricing in the Big Apple

Between emergency repair work at Penn Station and constant delays on an aging and overcrowded subway system, New York City commuters just survived one of the worst summers in recent memory. New York Governor Andrew Cuomo declared a state of emergency for the beleaguered transit system in June, just days after a derailment in Harlem injured 34 people, marking a dismal point for the century-old network. While such accidents are rare, stranded passengers, power failures, and signal malfunctions are symptoms of a system that is quite literally falling apart.

Critical infrastructure still has not recovered from damage wrought by Hurricane Sandy in 2012, meaning more closures and headaches are in store for discouraged residents. The origins of the current crisis can be traced back to years of chronic underinvestment and a daunting maintenance backlog. Desperate politicians are now scrambling to identify new funding for the Metropolitan Transportation Authority (MTA) in hopes of ameliorating the problem. These efforts have revived an idea that has long been relegated to the fringes of political feasibility in New York politics: congestion pricing.

Economists have long favored congestion pricing as the best policy to control traffic. Congestion pricing consists of charging drivers a fee during peak travel times, which encourages commuters to change the timing of their trips or shift to other means of transportation, freeing up lane space for those that are willing to pay the toll. While its application in the US has been largely limited to freeway lanes, cities abroad such as London and Milan have found success with programs applied to the entire city center. Traffic levels in London, for example, have been markedly reduced, and the transit system has raised funds while having the added effect of decreasing greenhouse gas emissions. Due to the success of similar programs, many believe the New York metropolitan area stands to benefit from a similar policy.

The last meaningful push for congestion pricing in NYC came in 2008, when a plan championed by then-Mayor Michael Bloomberg failed in the New York State legislature. While the economic rationale for congestion pricing is widely accepted, politicians often balk at what amounts to a regressive tax, charging equally without considering ability to pay. Counter to this intuition, however, opposition to congestion pricing is found less among low-income commuters and more among relatively affluent and politically powerful suburbanites who depend on their cars.

It’s therefore unsurprising that the New York State Senate, where suburban Republicans wield outsized influence, has thrown cold water on any talk of congestion pricing. This opposition may make congestion pricing appear rather unpopular, but studies have demonstrated that with a little education, many voters will come to support the policy. In fact, it appears that once congestion pricing is adopted, opposition largely vanishes; after implementing its own program, Stockholm saw levels of support jump from 30 percent to over 70 percent. With the right program, proponents in New York could see similar public acceptance.

Congestion pricing can take different forms, and no such legislation is currently on the state docket, but a proposal championed by the advocacy group MoveNY offers an instructive blueprint that has won the attention of a growing list of elected officials and advocacy groups. Importantly, the plan attempts to address some of the equity concerns that derailed Bloomberg’s earlier effort by spreading the financial burden more evenly across the five boroughs. Tolls would be reduced on bridges in the outer boroughs to compensate for the new charges in Manhattan, addressing the complaints of politicians from those neighborhoods. Most importantly, the plan would yield roughly $1.1 billion annually for public transit, funding that would benefit city residents and suburbanites alike.

While any renewed push for congestion pricing would face obstacles similar to those of previous efforts, the current transit funding crisis could alter the political calculus for elected officials. As traffic congestion in Manhattan worsens and public transit systems degrade, the possible revenue bump from congestion pricing grows more and more appealing to politicians dealing with strapped budgets. Facing voter anger over the seemingly endless subway problems, Governor Cuomo recently threw his support behind a congestion charge, a meaningful development in the years-long push for the policy. Cuomo’s switch from skepticism to support suggests there is momentum in the state legislature for a renewed effort.

Governor Cuomo’s support is probably the most important recent development, since he has considerable political capital to spend and a strong incentive to put wins on the board ahead of a potential 2020 presidential campaign. His efforts, however, will likely prove futile if he cannot get New York City Mayor Bill de Blasio on board. De Blasio remains opposed to a congestion pricing plan, maintaining that he has yet see a policy that strikes him as fair. De Blasio’s favored solution is a new tax on affluent residents to support a dedicated transit fund. While the mayor’s stance has attracted criticism from commentators, he has refused to budge, preferring to stick to “tax the rich” rhetoric. This dispute between the two ambitious politicians is just the latest chapter in their famous feud, which has intensified as each seeks to blame the other for the worsening transit crisis. With both pointing fingers and pushing different solutions, the likelihood of cooperation seems slim.

The confusion surrounding the whole debate is compounded by the opacity of the MTA’s funding and governance structures; most New Yorkers simply don’t know who to blame for the agency’s considerable troubles. This situation is intentional—while most elected officials want to play a role in controlling the region’s transit system, few want to become scapegoats if things go awry. All 17 members of the MTA’s governing board are appointed by the governor and confirmed by the State Senate, although these selections are based on the recommendations of officials in the service area, including the mayor. The result is that the New York City Transit Authority—including the subway and bus systems—is effectively run by the state government, even as those assets remain city property.

De Blasio’s recent stance is not the first time he’s dug his heels in opposition to a sensible transit policy. In the summer of 2015, the mayor famously launched an all-out war on Uber, attempting to lay the blame for the city’s gridlock at the feet of the infamous ride-sharing company. In 2015, as it is today, the best solution to the gridlock was congestion pricing, but de Blasio remained sensitive to the political optics of new fees, even if they are the most efficient and equitable option. This year’s mayoral election is a likely factor in his continued hostility—no politician wants to campaign on charging residents more money—but de Blasio and other officials cannot afford to sit on their hands for much longer if they want to address the city’s transit crisis.

For all the problems it’s causing, the MTA’s current state of disrepair presents a tantalizing opportunity to impose a congestion charge, a policy that could address many of the New York City metropolitan area’s challenges. The dire need for more transit funding will likely prove key in getting long-reluctant politicians to embrace a long-term solution to the gridlock that continues to stunt the region’s economic performance. The MoveNY plan appropriately analyzes past failures to develop a plan that is likely to garner widespread support, as the long list of proponents attests. Cuomo and de Blasio can only evade responsibility for so long, and in their zeal to point fingers have attempted to obfuscate the fact that they are both responsible. The governor seems to have come to his senses; only time will tell whether de Blasio will come to his senses and get behind the policy that could spell enduring improvements in what amounts to New York City’s transportation armageddon.