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Breaking the Gridlock on Congestion Pricing

by Gail Robinson, Mar 24, 2008
 

This article was revised on March 27 to reflect recent developments.

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In the 11 months since Mayor Michael Bloomberg put forth a plan to charge people to drive in Manhattan on weekdays, the proposal has been caught in government's equivalent of rush hour on Canal Street. With time running out for a final decision, will the plan reach its destination? Or will its opponents bring it sputtering into the junkyard of failed public policy initiatives?

The past days have seen a flurry of activity around the issue. Gov. David Paterson's announced on March 21 that he supported the idea and had submitted a bill for consideration by the State Legislature. On the following Monday, as the City Council held hearings on congestion pricing, Senate Majority Leader Joe Bruno introduced the bill in the Senate. And on March 26, Assembly Speaker Sheldon Silver introduced the bill in the Assembly -- without giving it his support

With the April 7 deadline for enacting the bill -- and getting $354 million of federal money -- fast approaching , the issue promises to be the subject of intense lobbying and debate in the days to come. As an indication, the City Council hearings were packed and went on from 11 a.m. until well into the evening. To kick things off, City Council has scheduled a full day of hearings on it for today (March 24). Testimony from people on all sides confronted the many issues that have swirled around this since last spring, particularly whether charging people to use city streets is fair and whether it can both cut air pollution and provide money for mass transit.

How We Got Here

In its current incarnation, the congestion pricing proposal would charge cars $8 a day to enter Manhattan south of 60th Street between 6 a.m. and 6 p.m. on weekdays.

The mayor's plan for congestion pricing -- which has seen changes over the past months -- was part of his PlaNYC2030 for an environmentally sustainable city announced on Earth Day 2007. (For more coverage of the plan, see Gotham Gazette's new Sustainability Watch.) The idea was to charge people to drive into or around the Manhattan business district during the workweek and use that money to fund mass transit improvements.

Proponents viewed it as both a solution to New York's persistent traffic congestion and air pollution problems and the constant shortage of funds for subways and buses. Opponents questioned whether the plan really would reduce noxious emissions and charged that it could pose a hardship to lower income New Yorkers who have to drive to Manhattan for business, medical appointments and the like.

As is so frequently the case with schemes from the city, the plan stalled in Albany. Bloomberg originally anticipated bypassing the City Council entirely so congestion pricing would just need state approval. It won support from Majority Leader Bruno and then Gov. Eliot Spitzer but ran into opposition from the Democratic-controlled Assembly. Assembly Speaker Sheldon Silver kept his opinions on this issue -- whatever they might be -- to himself.

As reporters wrote the obituary for the driving fees, the governor, majority leader and speaker -- the three men in a room, joined for this round by Bloomberg -- drafted a compromise. A commission would be appointed to study proposals to reduce traffic and issue recommendations. Its plan would then go to the City Council, the legislature and the governor for approval.

Hanging in the balance was some $354 million in federal Department of Transportation Funds. To get the money, New York had to enact a traffic mitigation plan including fees by March 31.

With congestion pricing proponents in the majority, the commission issued its report, calling for a modified version of Bloomberg's original plan, on Jan. 31. And then it sat. And sat.

As of March 19, no bill had been drafted in either the legislature or City Council. No one had stepped forward to sponsor the needed legislation. The new governor had not expressed an opinion on the concept nor had Silver. Meanwhile, a New York Times story indicated support eroding on the council. Frustrated at seeing the plan falter, Bloomberg lashed out at opponents,

"Our children deserve better from us than an inheritance of excuses bequeathed by business as usual," he said in a speech Wednesday." This isn't just a test of our policies. It's a test of our character."

Paterson Steps In

Then Paterson not only said he would back congestion pricing, but put forward a bill with specifics, including the size of the congestion zone, how the revenues would be spent, what vehicles would be exempt and so on. Calling the governor's actions "tremendously helpful," Michael O'Loughlin, director of the Campaign for New York City's Future, a coalition backing congestion pricing, said the bill "gives people something to work with."

In a written statement, Paterson said he had come to this decision because "congestion pricing addresses two urgent concerns of the residents of New York City and its suburbs: the need to reduce congestion on our streets and roads, and thereby reduce pollution and global warming; and the need to raise significant revenue for mass transit improvements."

Opponents expressed dismay. "Even Governor Paterson's good name on Good Friday cannot resurrect this flawed and unfair tax legislation called congestion pricing," said a statement from Walter McCaffrey of Keep NYC Congestion Tax Free.

Paterson's support does not guarantee passage. The City Council still needs to put forth a bill, although that measure, rather than being a detailed proposal, could simply urge the legislature to back the fees. Even though this council has proved reluctant to defy Bloomberg and Speaker Christine Quinn, who supports congestion pricing, many opponents remain and a close vote is anticipated (see related story) Quinn has said she expects the council to back the pricing plan.

The council recessed rather than adjourned its regularly scheduled March 26 meeting, leaving the door open to convene an unplanned meeting to consider the issue. Quinn has denied widespread speculation that the council will vote on the pricing plan on Monday, March 31.

Up in Albany, Silver continues to be less than enthusiastic. He was quoted as saying "we still have a long road to go" before the Assembly passes congestion pricing. The Daily News quoted Democratic legislators as saying that Silver's announcement of the bill was greeted with boos at a closed door meeting.

Not unexpectedly, the measure again could become ensnared in Albany politics and package deals. The Times reported that Silver could let congestion pricing move ahead-- in return for support from Paterson and others for some kind of tax on New Yorkers making more than $1 million. That idea, unlike congestion pricing, seems to have wide support among Democratic members of the Assembly. It's unlikely, though, to win approval from the Senate Republicans who have backed congestion pricing.

And polls show many New Yorkers oppose the idea. A Quinnipiac University survey taken in January found opponents outnumbered supporters almost two-to-one.

Supporters, though, expressed optimism. "I don't see how it can't work out," said Noah Budnick, deputy director of Transportation Alternatives. "We can't fit more cars in New York City and we can't move people around by car in the city. So we need to discourage driving and at the same time fund mass transit." Congestion pricing, in the eyes of its supporters, does all that.

The Current Plan

In the months since its original proposal, the specifics of congestion pricing have changed. The governor's bill incorporates the revisions put forth by the Traffic Mitigation Commission in January and includes a few changes made since then.

  • The zone: The Paterson bill adopts the zone set forth in the commission report and so would charge people simply to enter Manhattan south of 60th Street. Bloomberg's original plan would have set the boundary at 86th Street, would have exempted some peripheral highways, such as the FDR Drive, and would also have charged people to drive within the zone during the work week.


  • The fees: Under both the commission's recommendations and the governor's bill, the base fee for cars entering the area would be $8. Trucks would pay $21. But many drivers would end up paying far less since the system subtracts tolls used to enter Manhattan -- as long as the driver used E-ZPass to cross one of the rivers. So while someone using the toll-free Brooklyn Bridge would be charged an $8 congestion fee, a person who used the Queens Midtown Tunnel, which has a $4.50 toll, would pay that and a $3.50 congestion fee for a maximum charge of $8.

  • Residential parking: Many New Yorkers who live outside Manhattan but near subway stations objected not so much to the fee itself but to what people in neighborhoods without good subway or express bus access might do to avoid the fee. They feared their neighborhoods would become giant parking lots for commuters wanting to get closer to Manhattan and still avoid the fee.

  • In March, Bloomberg and Transportation Commissioner Janette Sadik-Khan proposed a residential parking permit program that would, Bloomberg said, "specifically be aimed at discouraging park-and-ride activity" and at areas with large facilities like sports arenas. Individual communities would decide whether to enact the program and would set regulations for it.

    The Paterson bill also calls for a residential permit parking program.

  • The money: New Yorkers, like most Americans, tend to be skeptical of what the government will do with their money. Some opponents of congestion pricing see it as just another tax. Many people express skepticism over whether the money really will go to transit as promised.

  • “I’m not going to believe for a moment the lock box can’t be broken,” said Councilmember Lew Fidler of Brooklyn, who opposes congestion pricing, at the March 24 hearing.

    For now, the commission and the governor are saying it will not be. The $8 fees are expected to generate enough money to operate the program and another approximately $490 million for transit improvements. Most of that will go to support the Metropolitan Transportation Authority's five-year capital plan that by some counts could add up to $30 billion.

    Critics contend that that means revenue from congestion pricing would be barely more than a drop in the bucket -- about 15 percent according to a calculation by the Times. Critics, such as Assemblymember Richard Brodsky, have charged that the fees have been “oversold” as a financing mechanism. "Congestion pricing was sold as a panacea, and what this [capital] plan admits for the first time is that it’s not,” Brodsky told the Times.

    Supporters of the fees say city officials and the transportation authority have to meet their commitments. “The big problem people have is they don’t trust the MTA and even city government for following through and using the money effectively,” John Liu of Queens, chair of the transportation committee, said.

    If the city and state approve congestion pricing, the city will get about $354 million in federal funds designed to promote plans to ease congestion. The substantial federal payment has spawned its own set of controversies. Last summer, Bloomberg said the city would lose the funds if the state didn't approve the proposal by July 16, 2007. It didn't - but the action the state took kept the city in the running for the money. Now Bloomberg has said the deadline is March 31. Most people think that, because of a technicality, April 7 is more like it.

    Then last week U.S. Rep. Anthony Weiner, a candidate for mayor in 2009 and a congestion pricing foe, said that a congestion pricing plan might not bring in more federal money after all. Instead, Weiner said, the Bush administration might reason that since New York was taxing itself to fund transit improvements it did not need Washington's help. Bloomberg countered that Weiner's statement was "one of the stupider things I’ve ever heard said."

    Whatever the specifics, proponents believe the prospect of federal funding helps their position. "It's a tough year to turn down $354 million," McLoughlin said.

  • Monitoring the plan: Will it work? Proponents expect the fees to cut traffic in the zone by about 6.5 percent during peak hours, resulting in "a 13 percent reduction in congestion," according to a report by the Campaign for New York City's Future. "That's the difference between a busy autumn rush hour and mid-summer when commuters are on vacation," it said. And in turn, proponents say, an easing of traffic jams will reduce pollutants, particularly those that cause asthma and the greenhouse gases that cause global warming.

  • Opponents counter that the plan's backers underestimate the costs and overestimate the benefits. In a report, the anti-congestion pricing group concluded congestion pricing would reduce citywide traffic by only 2 percent. And because cars and trucks are not the city's chief source of greenhouse gas emissions -- buildings are -- they say, "Even if the system is as effective as its proponents claim, it will reduce emissions by only 0.4 percent."

    To address the claims and counterclaims, the governor's statement says his bill will require the city to "oversee a monitoring program for traffic, air quality, noise, parking and other environmental impacts and release annual reports" as well as a preliminary report six months after the program begins.

    A Free Ride for New Jersey

    Even among supporters of congestions pricing, two key issues remain unresolved. One is what some call the "Jersey inequity."

    Because the plan subtracts bridge and tunnel tolls from the congestion charge, people crossing the Hudson River -- in other words -- those coming from New Jersey would not pay any more than they do now.

    In a letter to Bloomberg last month, some 20 members of the City Council, most supportive of congestion pricing, laid out some concerns. One was the need for residential parking permits. The other was the question of the Jersey drivers. As it is now, said Tim Roberts, policy director for Councilmember David Yassky, who spearheaded the letter, "There's no disincentive for New Jersey suburbanites to drive in."

    The council members then asked Bloomberg to fix the problem "either by amending the plan to require commuters from outside New York City to pay a congestion fee in addition to bridge and tunnel tolls, or by forcing the Port Authority to agree to devote a significant portion of their revenue from Hudson River crossings to funding mass transit in New York City."

    While Bloomberg has not yet endorsed either of these ideas, he did leave the door open to compromise. In his response to Paterson's support Friday, Bloomberg issued a statement saying, "We will work with the governor and our partners in the State Legislature and the City Council to address outstanding issues - including reducing the impact on lower income drivers, and concerns about commuters who use Port Authority crossings contributing to the MTA Capital plan."

    At the City Council hearing, transportation commissioner Janette Sadik-Khan seemed to back-pedal, telling council members it might be illegal for the city to have one fee for people coming from, say, Queens and another for people crossing the Hudson. Rit Aggarwala, director of the mayor’s Office of Long-Term Planning, indicated the law might not be the only sticking point. “The other is a policy question of whether any special treatment is a good idea,” he said.

    Regardless of its merits, the New Jersey issue is an important one, said Rich Kassel, a senior attorney at the Natural Resources Defense Council. "There is a large block on the council and probably of Assembly members for whom this is a threshold issue and it will have to be dealt with," he said.

    Roberts said Yassky wanted the changes, but would support congestion pricing anyway because whatever the plan's failings "it's better than nothing."

    Penalizing the Poor?

    And what about those low-income drivers? Proponents of congestion pricing question how many there really are. For example, in a look at Paterson's old State Senate district in Harlem, the Tri State Transportation Campaign found that about 80 percent of the residents, with an average household income of about $38,000 a year, did not even own a car. The 20 percent who did own a car had an average household income of more than $89,000.

    Opponents of the charges, though, say those numbers are misleading. With spotty transit service in outlying areas of the city, many people of modest incomes do rely on cars to bring them to Manhattan. In particular, they cite an elderly person who has to come to Manhattan for medical care.

    Further the plan heavily favors people who pay tolls with electronic E-ZPasses. Under the plan, users of the pass pay a congestion fee of $8, while those without them would pay $9. And while the E-ZPass users have the fee deducted from the money in their accounts, those without the passes will have to figure out how to pay — and pay quickly The bill carries a $65 fine for anyone who does not pay a congestion charge within 48 hours of incurring it.

    The city wants to encourage E-ZPass use. But the preferential treatment given those who have them raises concerns about equity since occasional and low-income drivers may be less likely to have the electronic tags than more affluent drivers.

    There does seem to be movement toward providing a tax credit for lower income people who must drive into the city. The New York Post reported that officials could offer a break to motorists who pay the $8 and qualify for the earned-income credit, $35,241 a year for a family of three in annual income.

    "It'll cost something like $10 million" out of the $500 million expected to be raised, the source told the Post adding, "We're not talking about a lot of money."

    Even so, it would serve to blunt one of the more powerful arguments the opponents have at their disposal.

    In a Jam

    No one argues that New York City does not have a traffic problem. Over the past year, a number of plans have been put forth to address it. Some have called for putting tolls on the East River bridges, which the commission considered and ultimately rejected. Keep NYC Congestion Tax Free put out a multifacted plan to reduce traffic, including charging more for curbside parking, reducing the number of free parking permits for city employees, changing the toll system on the Verrazano Bridge.

    In the days to come, people on both sides will press their representatives. Advocates will seek to convey the message that "this is an opportunity for elected officials to make a huge impact to improve things here," said Budnick of Transportation Alternatives.

    But given the political volatility of the idea, and a complicated election calculus spawned by legislative elections this year and many term-limited council members casting about for their next post, no one expects it to be easy. Members of the legislature and the council seem to be eyeing each other warily, wondering who will blink.

    "No one knows who moves first," said Kassel. But, he said, "I am seeing a lot of people not ready to vote for it but who recognize that congestion pricing is coming" and that we need to fund the transit system.

     


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