Exactly What We Lost When We Lost Congestion Pricing

Janno Lieber, chair of the Metropolitan Transportation Authority, stood before his board on Wednesday and put a hopeful face on a nearly hopeless situation. “We do take the governor at her word that she is committed to funding the capital program,” Lieber told the MTA’s board of directors. Governor Kathy Hochul, of course, decided two months ago to “indefinitely pause” congestion pricing, the tolling plan that would pour $15 billion into the transit system. The ripple effect from that decision just keeps growing — at a cost to her credibility, weeks into the mess without detailing a realistic alternative to replace funding, and to the finances of the MTA, where Lieber continues to say Hochul will find a way to fill the giant hole she punched into his budget, even as his accountants quietly warn of a crippling financial mess.

On July 30, shortly before Lieber addressed the board, Hochul pulled $54 million from a previously untapped $85 million state account to fund some utilities-relocation work for the future 106th Street Station of the Second Avenue Subway. Lieber celebrated the decision in his remarks, recognizing that it means the project is not, for the moment, dead. Then he brought up the rest of the subway system and dropped the hammer. “Concrete and steel, you poke holes in it, subject it to water and salt for 100 years, it’s going to give out. And that is what’s happening and we must do something about it. I’m optimistic that the decision-makers in Albany, all of them” — hint, hint — “understand the need and that they will respond.” After all, $54 million down means that there’s $14.94 billion (give or take) to go.

Lieber has to cling to hope — in part because Hochul is his boss, in part because her decision is just getting more expensive. The MTA has commitments from the federal government for an additional $1.5 billion to capital projects like the Second Avenue line — and it’s money that arrives only if the MTA comes through with its share, so it too is in jeopardy. But the loss of new subways is just the start. Without that funding, the MTA will have to slow down its bus orders and keep running older vehicles that need more maintenance: That’ll cost $50 million in 2025 and grow to $150 million by 2027. Ditto delays on replacing old commuter trains ($20 million a year). The agency will have to spend more on overtime and on-call contractors to keep up with breakdowns in signals, switches, and other systems that were set to be replaced, costing $90 million a year by 2026. Congestion pricing was going to cut the number of cars entering the Manhattan core by 17 percent, which would have meant faster buses, again saving the MTA some money: That’s another $10 million per year. Officials also forecast that it would increase overall transit ridership by about 1.25 percent, and that’s another $70 million in potential revenue taken off the books.

It gets even worse. The MTA has roughly 7,000 permanent employees providing labor on construction projects — flaggers for track work, for instance — who won’t have any projects to work on. They’re prized union jobs, and having them idle will cost $100 million in 2025 and another $200 million in 2026. That cost will likely go away by 2027 because officials hope to “attrit” (their word, not mine) the MTA’s payroll. It would likely take a brutal hiring freeze to shrink the MTA’s overall payroll by about 10 percent (or execute enormous layoffs). Bonds that were set to go out in 2030 to finance projects far down the line will instead go as early as 2027. That’s another $300 million in unexpected expenses. Altogether, this comes out to roughly $245 million for 2025, another $490 million for 2026, and potentially $640 million in 2027 — a total of nearly $1.4 billion in onetime and recurring costs over three years.

Put that on top of the $16.5 billion that would pay for new subway cars, commuter trains, buses, expansion of subway lines, wholesale replacement of decrepit La Guardia–era mechanical signals, and on and on. It’s $18 billion at risk from one decision by Hochul, with no plan B ready to go.

Lieber knows that there are three possible outcomes here, and he laid them out. He openly beseeched Hochul and the Democratic leaders in Albany to avoid the first and worst of them: Everyone fails to come to a deal — or agrees that the easiest way to deal with the mess is just to shove it all under the carpet, knowing that it will take a few years for the lack of maintenance to show up in ways that really hurt straphangers, after which they can blame MTA management. After all, generations of Albany leaders did exactly that and basically got away with it until the 2018 Democratic primary, when Andrew Cuomo’s opponent, actress and activist Cynthia Nixon, managed to put a catchy hashtag on his stewardship: #CuomosMTA. (Not that it stuck well enough for her to win.)

Second, and perhaps even more cynically, Hochul and lawmakers strike a deal (likely via the state budget) that forces the MTA to borrow against money that would otherwise be used to run buses and trains. That’s what happened two decades ago during George Pataki’s governorship, when politicians loaded up the agency with debt to finance East Side Access, the first leg of the Second Avenue Subway, and a whole host of other projects. “Extra debt service burdens the operating budget, and that will force the board again to deal with the grim options: layoffs, service cuts, fare hikes,” Lieber said. He also noted that Cuomo — who struck the budget deal that ordered up congestion pricing, then came out for its cancellation — warned that the toll was needed to avert a 30 percent fare hike, which if enacted now would take us to about $3.80. And if you think a toll is unpopular, try jacking the fare.

Then there’s Door No. 3: Hochul finds the money somewhere — and the MTA has publicly professed that it doesn’t care where it comes from. But the politicians will. Hochul justified whacking (sorry, “indefinitely pausing”) the toll by saying that it would hurt businesses in New York City, yet her first proposal to replace the money — quickly rejected by lawmakers — was to tax those very businesses. Other Albany ideas for raising more money include the perennial suggestion of casinos as well as their mutually opposed twin, expanded online gambling.

Or, of course, congestion pricing could come back. Hochul has, depending on the day, argued that this really is just a pause; complained that the proposed peak toll rate of $15 “is too much at this time”; reportedly floated a lower rate to lawmakers (who then floated it to the New York Times); and told a forum organized by the Albany Times-Union that she was examining all options. But, when pressed a few days later, she told a roomful of reporters, “I’m looking at options. I don’t know how you define ‘on the table.’” Her staff got her off the podium shortly after that exchange.

Hochul is not the only person to say they’re afraid the toll would crimp Manhattan’s recovery — which leads to the great paradox of Manhattan in the post-pandemic era. There’s no shortage of traffic. There’s a shortage of people. The streets are full and maybe never have been fuller — backups to the tunnels and bridges are commonplace well after rush hour ends, and buses and ambulances have never been slower. There’s no space left for cars. Yet, entire office towers sit empty and Broadway theaters struggle to sell out. Manhattan, after all, is smaller than Dallas–Fort Worth International Airport. Even if every car were smaller than a Mini Cooper, say ten feet long and five feet wide, that still adds up to one person per 50 square feet. That space on a subway train can move two dozen people at a time. The shift from trains to cars has itself become a major drag on Manhattan’s recovery, and the sooner we get back to the business of bringing people into Manhattan instead of traffic, the sooner we get Manhattan back in business.