What Made Kathy Hochul Flip on Congestion Pricing?

On June 5, Governor Kathy Hochul stunned New Yorkers by canceling (or placing on “indefinite pause”) the congestion-pricing fee for driving into lower Manhattan, blowing a $15 billion hole in the MTA’s budget. The state was set to start collecting tolls in less than four weeks, June 30. Hochul had long highlighted her willingness to see the program through even though it polls poorly, arguing that right decisions are not always popular ones. Few officials, even in her own office, were given a heads-up. Much of the city and state government was left asking, “What got into her head?”

“This came right from her brain,” one Albany veteran says. “When it’s this nonsensical, that’s the origin story.” And from another: “Irrespective of if you agree or disagree with congestion pricing, the handling of this was maladroit. There were more elegant ways of getting out of it than the way that she did.” The person adds, “The real question is, Where does it go from here? She doesn’t have a plan B, or a plan C, or a plan D.” A third, a Hochul insider, says, “It’s seismic in ways that we don’t even know yet.” Or as another Albany insider puts it decisively, “She traded the MTA for a House seat? Are you fucking crazy?!”

In politics circles, the reading of what happened goes like this: Hochul—edgy over Democratic weakness on Long Island—moved to kill the toll after a focus group found that congestion pricing could cost votes in competitive districts. A half-dozen downstate congressional seats are in play. Although reporting has suggested that Hakeem Jeffries, the Brooklyn representative who may soon be Speaker of the House, planted the idea, people close to both their offices say otherwise. Instead, says a person familiar with communication between the two, it was Hochul—not Jeffries—who “put it into the ether. She put this idea of a pause into the meeting.”

“She’s very, very sensitive to criticism about the election,” says an Albany insider, “about Long Island, and about her coattails.” In 2022, Hochul won by just 6.4 points as Republicans campaigned on fear of crime and the bail-reform laws approved in 2019. “It’s very easy for me to imagine her saying, ‘I’m going to get killed,’ ” the person adds. Three people who have been briefed on the decision say political considerations were at the center. “This was Hochul freaked out—they don’t want this to become the bail reform of 2024,” says one. “This isn’t popular. Look at the polling numbers,” another was told by Hochul’s right hand, Secretary to the Governor Karen Persichilli Keogh.

Congestion pricing is a proven program that is nonetheless unpopular here. Nearly two-thirds of voters in New York City said they oppose the toll in an April survey by Siena College, and the suburbs sat at 72 percent against, 22 percent for. Yet sources close to those swing-seat campaigns say they have not seen results from any focus group. That’s probably because (as Hochul’s pollster, Jefrey Pollock, confirmed to me) the governor’s campaign had not commissioned one.

Besides, operatives in the contested races have severe doubts that the issue motivates opposition or causes voters to switch tickets. Republicans hardly mentioned the toll in their battle to hold on to George Santos’s seat in Nassau County and northeastern Queens. The Republican candidate, Mazi Pilip, “sent one press release on congestion pricing and then basically ignored it for the rest of the campaign,” says one Long Island operative. “We did not see any groundswell back in February regarding this issue at all.” Tom Suozzi won by eight points.

Hochul insiders and Albany veterans offer a second theory of her flip: that the governor was wobbly all along. “She’s been very uncomfortable with this,” says the Hochul insider. “It took a lot of work to get her there.” Staff in the governor’s office had to persuade her to back the program when she took over the office. Hochul, after all, had made her bones campaigning against tolls on the New York State Thruway. That’s also where she first worked extensively with Keogh, who was the person then–Senator Hillary Clinton assigned to the issue.

Publicly, Hochul had defended the toll. But soon after she won reelection, her office asked job applicants for their ideas on congestion pricing’s “future,” says one insider. All options were said to be on the table, which implicitly included axing the whole thing. In January, when the teachers union challenged the toll in court, the pushback from the governor’s office was notably milquetoast. The last guy, one source jokes, would have punched back by approving 10,000 charter schools in the city.

The last guy was, of course, Andrew Cuomo. Since he was forced from office, Hochul has framed herself as someone who can deliver projects as Cuomo could without his feral persona. In March, Cuomo published an op-ed in the New York Post that called for delaying the program, claiming it would slow post–pandemic recovery and citing concerns about violence on the trains. “That’s when she spoke to me,” says a veteran city political operator. “She was apoplectic.” A second Albany source confirms that there were “grumbles directly from people close to her about the Cuomo op-ed.” Hochul would go on to cite similar rationales when she backed out. “I’m sure that op-ed loomed large,” the insider adds. “She has it in her mind that the only way to look strong is to look like Andrew Cuomo.”

“This is false,” says Hochul spokesman Anthony Hogrebe. “As the governor stated, her decision was informed by conversations with a wide range of everyday New Yorkers and concerns they expressed related to the economy.” A member of her own camp clarified her thinking. “The governor’s had some issues with this for a while,” the person says. “Economic sentiment has not changed and is still in a very bad place compared to where we thought it might be. Economic sentiment translates frequently into voter anger at politicians. Come November, winning the House may be the only thing standing between Donald Trump and a unified Republican government that could destroy democracy … Taking this issue off the table has to help the Democrats.”

Hochul played it cool till late May, mentioning the topic to Assembly Speaker Carl Heastie and to Councilwoman Gale Brewer a few days in advance. But only on the day before her video went up did it become clear that the program would be halted. Newly looped-in government staff had just hours to propose an alternative. Hiking the city payroll tax was firmly and quickly rejected by lawmakers. Hochul’s staff came back with a second offer: A promise to provide the MTA with up to $1 billion per year for the next 15 years, about as much as the congestion toll was expected to generate for upgrades and system expansion, from … somewhere in the budget. It didn’t fly either.

Sudden moves have fiscal consequences. Wall Street has flagged the MTA’s debt and may drop its rating, whereupon a lot of money that could have gone to running trains will go toward interest. New York is now at risk of losing billions in federal funding for projects like the Second Avenue Subway. Planners may defer replacement of the Depression-era tech of the lines under Manhattan’s Sixth Avenue and Brooklyn’s Fulton Street. Ditto plans to order hundreds of new train cars for subways and commuter lines.

Save a court order or reversal from Hochul, the MTA and transit activists have little to hang their hopes on. New York State’s Department of Transportation has to sign off to start the program, and it is fully under Hochul’s control. On June 10, MTA chairman Janno Lieber announced an “intensive review” to “reprioritize and shrink” the agency’s budget for construction, upgrades, and expansion projects. “We simply cannot award contracts,” he said, “without dedicated funding in place.”

The damage done to Hochul’s close working relationship with MTA chairman Lieber has been on vivid display. At his press conference on June 10, he opened with an extraordinary—by bureaucratic standards—statement about what had unfolded: “The governor plays on a statewide and national field, and sometimes that means we don’t look at things exactly the same.” Two days later, Lieber’s visible sadness was replaced with audible frustration. “Can you just talk a little bit about what you’ve learned about Governor Kathy Hochul over the last couple of weeks?” I asked him. Lieber’s one-word reply: “No.”