New York City’s congestion pricing plan is back and will go into effect on January 5, Governor Hochul announced Thursday.
But the daily toll – which Hochul halted indefinitely last June, three months before it was due to come into effect – will be $9 for at least three years instead of the originally planned $15 toll, after which it will be reassessed . .
“We will still get the $15 billion to fund the MTA,” Hochul told reporters, “and drivers will pay $6 less.”
The initial toll, which was reached after years of discussion among state lawmakers, transit officials and federal regulators, was intended to charge motorists a base toll of $15 per day for entering Midtown and Lower Manhattan by car. Larger vehicles would be charged at a higher rate, and drivers who had already paid tolls late at night in one of the tunnels would receive discounts.
The revenue from the congestion tolls – expected to reach $900 million annually – would then have been used to pay off $15 billion in new MTA bond debt intended to support a long list of projects in the 2020-2024 capital plan. finance agency.
As previously reported by the Daily News, Hochul’s modified plan, which was formally announced Thursday, keeps the same mechanisms but reduces each of these figures by 40%.
That reduces the $15 base toll rate for passenger cars to $9 per day, and the late-night rate from $3.75 to $2.25. The plan also reduces toll credits – discounts given to motorists who have already paid tolls to enter the city through the tunnel – by 40%.
That means less revenue going to the MTA debt service, even though it is assumed more cars will enter the city than would under the $15 toll. Kathryn Garcia, state director of operations, estimates that toll revenue will be closer to will reach $600 million per year.
State officials said Thursday that despite lower revenues, the toll would raise $15 billion in borrowed money over an extended period — likely because the MTA would sell tranches of bonds more slowly.
“With any bonding program, it’s a multi-year proposal,” said Blake Washington, the state’s budget director. “The approach we have today fully funds the capital plan over several years.”
That means that while all projects that rely on congestion pricing — a list that includes Phase 2 of the Second Ave. subway, elevators at 23 subway stations and modern computerized signaling on a slew of subway lines — are expected to be funded, some projects also will be financed. that money may take longer to secure and some projects may have to be put on hold.
Sources in both Hochul’s office and the MTA suggested to The News that expensive items like the Second Ave. metro and legally mandated accessibility upgrades would be at the top of the list. The $15 billion would also pay for $3 billion in modern subway signals, $3 billion in repairs and $1.5 billion in new subways, among other priorities.
Still, MTA leadership — which stopped awarding new capital contracts amid confusion over congestion pricing this summer — said Thursday’s announcement would allow work to restart soon.
“Now we know we have a source [of funding]so that we can actually move projects forward,” said MTA Chairman Janno Lieber.
“We’re going to [request for proposals] for the tunnel boring in the Second Ave subway. immediately, as a result of the actions taken by the Governor today.
The changed toll still must clear a number of procedural hurdles before the MTA can charge motorists.
The transit agency’s board, which greenlighted the initial $15 toll in March, must sign off on the initial $9 toll before it can be sent to federal regulators for approval. The MTA board is expected to do so on Monday.
State law then requires three more weeks of public notice, during which the city, state and federal transportation departments are expected to sign off on the plan a final time.
Meanwhile, congestion pricing continues to face legal challenges from the state of New Jersey and others — challenges that were shelved along with the tolling plan this summer and may now reemerge.
‘Am I confident that there will be no lawsuits? No, I’m in the middle of nine now,” Hochul said when asked about that possibility. “It seems like we’ve been sued every day of the week – this whole issue has been a growth industry for lawyers.”
“I am not afraid of any threats of lawsuits,” she said. “We’re not worried about it.”
