Hochul faces consequences for delaying congestion charge due to political decision

New York City‘s Metropolitan Transportation Authority now faces a $15 billion gap in its budget, with critical repairs to the subway and bus systems needed, and the plans to pay for it have been put on pause.

On Wednesday, Gov. Kathy Hochul (D-NY) stalled plans to implement congestion pricing for drivers coming in and out of Manhattan. The money generated by this initiative would have been used to make updates to aging infrastructure, modernizing technology, and making stations more accessible to people with disabilities.

Now the governor is considering taking money from the state’s reserves or creating a tax on businesses in order to come up with the funding to cover the projects in the MTA’s $51.5 billion capital program. However, any tax increases by Hochul will require approval from the state’s legislature.

“Where it leaves the governor is in between a rock and a hard place because she’s the one that said that she had the money,” Lisa Daglian, executive director of the authority’s Permanent Citizens Advisory Committee, told the New York Times.

“It’s going to be very surprising to very many of us as to where that money is going to come from,” she added.

MTA leadership feared that falling ridership levels post pandemic would lead to shrinking funding for the transit system that will fail to be able to cover its operating costs, much less needed repairs.

But last year, Hochul had allocated MTA new and recurring funding in the state’s budget.

The $15 billion generated from congestion pricing could not be used to subsidize subway and bus fares, nor to support daily operations. Its purpose was to fund long-term projects, with $1 billion of funding projected to come from toll collections and the rest through bond financing.

While Hochul’s halting of the program is new, the congestion pricing policy faced legal challenges for months thus prompting officials to halt most contracts for construction.

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​​“There’s more at stake than just delayed projects,” New York State Comptroller Thomas DiNapoli said. “If the MTA covers the shortfall in capital funds by using its operating budget to pay for more borrowing, less money would be available for day-to-day operations and goals, like increasing service.”

The MTA had already approved $555 million to install, operate, and maintain dozens of gantries and other equipment for congestion pricing at 110 tolling points throughout Manhattan.