RIP Congestion Pricing?

It should come as no surprise to anyone that President Trump just revoked approval of the recently installed congestion pricing program charging $9.00 to cars entering Manhattan below 60th Street. In a letter to Governor Hochul, U.S. Transportation Secretary Sean Duffy said that the administration will contact New York State to discuss the “orderly cessation of toll operations”.?

This decision is sure to be challenged in court by the State very soon. However, before we get to the law, the politics of course come first. The Trump administration argues that congestion pricing is a burden on working class Americans and is effectively a revenue raiser for the Metropolitan Transit Authority. In prior blogs, I have expressed concerned that this was an unfair hardship on first responders and public servants who deserve a carveout, but also know that most people who drove into the city were those who could comfortably?afford the cost of parking, tolls, and gas, which was already expensive.? We also knew it was being used to raise money for the MTA, but that is necessary due to the substantially reduced ridership due to remote work.?

Now let’s examine the strength of the federal government’s argument to terminate congestion pricing. The legal basis for the decision was set forth in an alphabet soup letter written by Secretary Duffy referencing many agencies and statutes. Interestingly, the letter did not invoke expansive theories of the presidential “unitary executive” and executive power. Rather, its primary rationale was based upon the premise that Congress has required that roads constructed with federal highway funds be free from tolls of all kinds, subject to limited exceptions under the Intermodal Surface Transportation Efficiency Act of 1991. One of those exceptions is for “congestion pricing pilot projects” implemented by states, local government, or public authorities. This undefined term was later amended in 1998 to “value pricing pilot program”.?

But if this is not meant to be a congestion pricing by New York State, then what is it? Well, Duffy argues that this method of tolling is known as “cordon pricing“, under which drivers who enter Manhattan south of 60th Street are charged tolls no matter what roads they use, with no toll-free option to enter the area. He asserts this violates the anti-tolling spirit of a 1916 law requiring that roads constructed with federal aid highway funds be free from tolls of all kinds, subject to limited exceptions.?

I am not impressed with this argument. Originalist Constitutional scholars otherwise favored by the Trump administration and the Federalist Society are known to construe that document by its literal meaning. So, shouldn’t we take the same approach here? Doesn’t congestion pricing and value pricing projects mean exactly what it says, and therefore should be allowed as specifically enumerated exception written into the 1991 law as amended seven years later? The Secretary claims that no statute contemplates cordon pricing in a situation where tolls are inescapable, and the Federal Highway Administration has not previously approved a pilot program that uses cordon pricing or does not provide a toll-free option. However, just because something wasn’t done before doesn’t make it illegal.?

Second, the Secretary contains that the imposition of tolls under the New York project appears to be driven primarily by the need to raise revenue for the MTA as opposed to the need reduce congestion.? However, he appears to admit that this argument is weak when he states that “I recognize that the preliminary project data published by the MTA reports a congestion reduction benefit“, but the toll rate should not be driven “primarily” by revenue targets.?

Indeed, the preliminary data shows a multitude of benefits from congestion pricing since its January 5 inception beyond increased revenues for the MTA. First, the MTA reports that weekday traffic is down 9% compared to the same time last year. This will not only reduce congestion which causes both inconvenience and economic loss, and also lowers air pollution over time. ?Second, while there was concern that business and other visitors would be discouraged from entering Manhattan since January 5, foot traffic in major business districts in the towing zone is up 5% according to the city’s Economic Development Corporation. ?Third, commute times have been lowered, which is better for the remaining drivers.?

Accordingly, the early reports are good. Congestion pricing appears to be on the road to success, just as in European cities like London and Stockholm. And yes, the MTA needs the money so we can have a decent transit system. This is all just basic urban planning, so let’s give congestion pricing a chance to succeed instead of kneecapping the program before it can get off the ground.?

Now let’s handicap the legal battle to come. New York State will undoubtedly seek a temporary restraining order allowing congestion pricing to remain in place. My esteemed counsel (Eric) advises that it must demonstrate a likelihood of success on the merits and irreparable harm to the city and state.?

The irreparable harm seems clear to me. Based on the early results, without congestion pricing there will be greater congestion causing economic harm and inconvenience and more air pollution impacting the health of New Yorkers and the loss of hundreds of millions, if not billions of dollars in desperately needed revenues for mass transit. The likelihood of success on the merits is less clear as the courts have a somewhat blank slate as there does not appear to be much case law dealing specifically with the definitions of congestion and value pricing. As a result, the sensible approach then appears to fall back on the plain language of the statute which allows the states to implement congestion and value pricing pilot projects indicating that NYS is likely to succeed.?

Secretary Duffy has been quite busy since his confirmation with the horrific plane crash in Washington, D.C. and other matters but we all know he’s not driving the bus here. Rather, there’s another New Yorker who knows a great deal about real estate who made this decision. If he were looking at it from the standpoint of a NYC real estate developer and building owner, he might give congestion pricing a chance to see if it can actually work, instead of trying to shut it down before it can get off the ground. It’s basic common sense.

Thank you,

Ruth Colp-Haber