Gov. Cuomo’s Congestion Pricing Proposal for New York City
March 15, 2018
New York City is proposing to deal with two concurrent transportation problems using one solution. Its traffic congestion ranks third worst in the world and traffic moves a record-low speed of 4.7 mph during peak travel. The main alternative to driving, the subway system, is suffering major delays due to deferred maintenance. The Metropolitan Transportation Authority (MTA) estimates that they will need approximately $836 million to begin addressing the needs of the subway system. Governor Chris Cuomo called a state of emergency in the subways last June, and began investigating new funding options to tackle the issue. His 15-person task force, “Fix NYC,”
Specifically, the proposal would charge vehicles that enter the most congested part of New York at the busiest times, with the dual goal of deterring people from commuting via car and raising revenue for other forms of travel. The cordon would consist of the central business district of Manhattan, which covers everything south of 60th Street, and would apply during weekdays between the hours of 6 am and 8 pm. While some existing bridges and tunnels to Manhattan already charge cars up to $12.50, the new cordon scheme would charge all vehicles this price, regardless of whether or not they come from across a river. New York residents living inside the designated cordon would not be exempt from paying the fee. All ride-for-hire trips, from Uber to traditional taxis, would be exempt from the cordon charge but would have to pay a $2.00 to $5.00 per ride fee that would vary depending on the time, location within the cordon, and day of week.
The new charges would bring in serious revenue. Fix NYC estimates pricing would bring the city annual gross revenues of $705 million from cars, $105 million from commercial vehicles, and $690 million from ride-for-hire fees for a total of $1.5 billion annually. But the program would not be implemented overnight. The draft proposal would roll out in three phases, to be completed by 2020.
Phase 1 explains that, “before asking commuters to abandon their cars, we must first improve transit capacity and reliability.” This includes identifying and improving current issues in New York’s transportation system, specifically the subway. Other portions of Phase 1 include enforcing and reforming current regulations in the central business district, which is the target market for congestion pricing. Target regulations for reform and enforcement include bus lanes and NYC placard laws. Phase 2 outlines the introduction of surcharges, beginning with ride-for-hire vehicles. Phase 3, the final phase, outlines the implementation of truck and car pricing. The report suggests possible expansion in the future if the program is successful, such as weekends between 11 am and 9 pm.
If implemented, New York would join three international cities, London, Singapore, and Stockholm, which have comparable programs. In London, drivers are charged 11.50 pounds ($15.96 USD) per day to enter the designated cordon between 7 am and 6 pm Monday through Friday. Even with the exclusion of fees on major holidays, London saw 200 million pounds ($277.5 million USD) in revenue in 2013 used for investments in their public transportation. Singapore has had it’s modern form of cordon pricing since 1998 with the current system charging drivers up to $2.00 USD between 7 am and 7 pm on main roads depending on the car, time of day, and location within the central business district to which they enter. Their system is adjusted every calendar quarter to reach what is called “golden range,” or traffic flowing at between 20-30 kilometers per hour on main streets. Their program enabled a 24% reduction in weekday traffic upon implementation and annual revenues of approximately $150 million USD.
Stockholm implemented a comparable congestion-charging program in 2006, charging ranging prices from $1.33 USD to $2.67 USD to vehicles entering the central business district between the hours of 6:30 am to 6:30 pm, with a maximum of three charges per day. Unlike Cuomo’s proposal , taxis are exempt from their charge. Congestion dropped in the city by 25% upon implementation and the city sees annual revenue of approximately $100 million USD.
The cordon-charging proposal is far from complete, as major political hurdles remain. Fix NYC was the Governor’s proposal, and conspicuously did not include anyone from New York City Mayor de Blasio’s office. De Blasio is vehemently against the proposal, arguing that such programs will disproportionately affect the lower and middle class citizens that commute into the central business district from the outer boroughs, many of whom do not live near a public transportation option. Opponents of the legislation argue that the tax will equate to over $1,000 per year.
Instead, Mayor de Blasio proposes implementing a “Millionaire Tax” to fund subway improvements. Others in opposition to the fee suggest removing bike lanes in the highest trafficked areas of Manhattan by car or reducing fares on the Long Island Railroad, serves much of the car commuters in Queens.
However, only 4% of the commuters traveling into the central business district would be subject to the fee in a recent study done by the Community Service Society (CSS). Only 2% of what the CSS considers to be “working poor” are subject to the fee, all others work outside the cordon or commute in other ways. And de Blasio’s millionaire tax would net between $700 and $800 million for the city, far less than the $1.5 billion per year than Cuomo’s program.
De Blasio’s opposition might not matter much. For Cuomo’s proposal to be implemented, it needs to be approved by the State Legislature, bypassing the Mayor’s office. The proposal was received in the legislature in late January, but the current priority in New York is the passage of new budget legislation by April 1. Regardless of when or if the Legislature takes up the proposal, cordon pricing in New York would transform the transportation landscape.