New York City

New York Inches Closer to Charging Drivers for Subway Repairs

State lawmakers are warming to the idea of congestion pricing.

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Madrabothair/Dreamstime.com

Congestion pricing is getting closer to becoming a reality in New York City, as local and state politicians scramble to find money to fix the city's ailing subway system and address its gridlocked roads.

On Monday, New York State Assembly Speaker Carl Heastie (D–Bronx) told reporters that the upcoming 2019 state budget would include a new fee on drivers entering central and lower Manhattan, with the revenue earmarked for subway repairs.

If passed, this kind of congestion pricing scheme would be the first of its kind in the U.S. Internationally, cities like Stockholm, Singapore, and London have used similar tactics to successfully reduce traffic congestion in their central business districts.

New York City is the fourth most congested metro-area in the country according to one recent report. Four of the top 10 most congested traffic corridors pass through the city.

Given the size of the problem, charging drivers for the road space they take up isn't a bad idea. But depending on how it's implemented, congestion pricing in New York could end up just being another government cash grab. The difference boils down to who the fee applies to and what it's spent on, says Baruch Feigenbaum, a transportation expert with the Reason Foundation (the nonprofit which publishes this website).

"I think the geographic area that they're choosing is correct," says Feigenbaum. But, he adds, "I think some of the money needs to go to improve roadways and it doesn't look like any of the money is going to do that."

According to reports of Heastie's comments on Monday as well as a congestion plan put forward by a taskforce convened by Gov. Andrew Cuomo last year, the revenue from any congestion pricing plan would go exclusively toward fixing New York City's ailing subway system.

Estimates from officials at the state's Metropolitan Transportation Agency (MTA)—which runs the subway—put the costs of needed capital improvements of the subway system as high as $60 billion over 15 years. The congestion pricing plan put forward by Cuomo's taskforce—which would charge drivers $11.52 to enter Manhattan streets below 60th street—could support about $15 billion in new bonds to pay for repairs.

That's not a bad idea, given that the subway can serve as a workable alternative for many folks who're currently driving or taking for-hire vehicles in Manhattan. These road users would benefit from a smoother, more reliable transit service that catches fire less regularly.

For many suburban commuters or residents in New York City's outer boroughs, however, driving is their only realistic option. Asking these motorists to pay more to enter the city without spending any of that new revenue on improving the road network they use would make congestion pricing just another tax.

Some legislators have proposed spending new revenue on commuter rail lines that run out to Long Island and the suburbs north of New York City. That would broaden the benefits of a congestion pricing scheme, but still not do much for those who're dependent on driving.

Another concern are the numerous exemptions being proposed. The New York Times reports that there might be carve outs for low-income drivers or those travelling to things like medical appointments. At least one lawmaker has proposed exempting New York City residents from any new fees.

"The political tendency is to exempt as many people as possible and that's obviously going to cause some revenue problems," says Feigenbaum. It would also lessen the impact any congestion pricing plan would have on actually reducing congestion, which is the entire point of the policy.

There's still a lot of details to be worked out. Lawmakers are hoping to pass some sort of budget before April 1. Depending on what compromise legislators settle on, New York could serve as a model for congestion pricing and traffic management, or a cautionary tale of what not to do.

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  1. this is hilarious. Why not charge the riders?

    1. They prefer to go after the money instead?

  2. …there might be carve outs for low-income drivers or those travelling to things like medical appointments.

    How are they collecting this? I hope it’s a fleet of unaccountable enforcement officers who can shake down drivers for fun and money.

    1. Cashless tolling I guess. Looks like a metal grid in the air. You get a bill in the mail.

    2. I got a phone poll a few years ago asking me about highway expansion or something around DC. One question was whether to pay for it with tax increases or tolls. I said if those were the only two choices, I pick tolls. “What about poor and low income drivers?” Yeah, what about them? What about poor and low income drivers having to pay a tax on their car, registration fees, license fees, mandatory insurance, etc.? Now I have to be taxed for a road I’ll never drive on because someone else is considered poor? And what kind of tolls are we talking about here, $2 or $20? What kind of taxes are we talking about here? My guess is the poll was intended to show majority support for increased taxes.

      1. It’s such a trivial carve-out for tolls if they really wanted to anyway.

  3. “Depending on what compromise legislators settle on, New York could serve as a model for congestion pricing and traffic management, or a cautionary tale of what not to do.”

    I vote for the cautionary tale of what not to do…….

    1. New York is a cautionary tale of what not to do.

  4. “”That’s not a bad idea, given that the subway can serve as a workable alternative for many folks who’re currently driving or taking for-hire vehicles in Manhattan.””

    Really? As someone who commutes on the subway every day. This is a joke.

    “” But depending on how it’s implemented, congestion pricing in New York could end up just being another government cash grab. “”

    NY doesn’t spend gas tax money on road repairs.

    “”which would charge drivers $11.52 to enter Manhattan streets below 60th street?”””

    Great, so someone spends $15 dollars to cross the Hudson, only to get nailed for another $11.25.

    1. So basically there’ll be a perpetual traffic jam at all points along 61st?

      1. You don’t have to stop or slow down for cashless tolling.

        Since tolling has been made easier, I expect cities to roll out more tolling.

        1. No, I mean, there’ll be a perpetual traffic jam due to people changing modes of transport right around the line to avoid the toll. I’m basically picturing gobs of people being let out of personal cars and cabs all along the block or two before the line.

          1. Ah.

          2. Walk a block and pick up a ride from a car that stays inside the boundary?

            1. Exactly, give rideshare drivers even less incentive to leave Manhattan

  5. How are they going to do this, logistically? Are they going to have toll booth/license plate readers on every avenue, the West Side Highway, and FDR Drive? Is it only going to apply to the MTA crossings below 60th street? Will cabs be exempt? The Lincoln and Holland Tunnels are controlled by the Port Authority and I doubt they’ll like adding MTA fees to their tolls, and NJ will probably fight it.

    1. Toll booths have been going away. Cashless tolling is the way. It’s a metal grid above the roadway with cameras. It takes a picture of you, and your license plate. You get the bill in the mail. It’s also known as high speed tolling since you do not have to slow down.

      I’ve heard that if you do not pay the bill on time, it jumps to a $50 fine.

  6. “At least one lawmaker has proposed exempting New York City residents from any new fees.”

    That was DeBlasio, right?

    1. Willing to spend that economic capital down to a nub.

  7. Given the size of the problem, charging drivers for the road space they take up isn’t a bad idea…Asking these motorists to pay more to enter the city without spending any of that new revenue on improving the road network they use would make congestion pricing just another tax.

    This sort of requirement/mindset is dumb-as-rocks. Cities have to develop a TRANSPORT grid on public land. That usually means multiple modes – not merely pigeonholes called ‘roads’, ‘sidewalks’, ‘underground’, ‘overground rail’, etc.

    I personally think that the capital costs of developing/maintaining that grid should mostly be funded via land/property taxes because the value of land in a city is very much tied to quantity/quality of transportation options at that specific location to get around the city. And cities should generally get out of actually operating transportation to avoid direct user fees. Rather, to the degree that costs can’t be covered by land taxes, cities should simply lease access to infrastructure ‘slots’ (bus/rail stop loading, limited access roads, etc) to ANY private operator at whatever the market will bear for that.

    There is a free-rider problem re suburbs that don’t pay for any of that transportation system but still use it. Which is a big reason why land taxes can’t cover even all the capital/opportunity costs of that transportation infrastructure. There is no reason that cities should limit those fees merely because burbs want things pigeonholed.

    1. “”There is a free-rider problem re suburbs that don’t pay for any of that transportation system but still use it. “‘

      Like what?

      1. What part of the city’s tax base for transportation infrastructure are suburbs included in? some transport stuff (maybe even NY idk) is multi-county/regional – but a lot of it is solely on the city itself and the vast majority of the land that is set aside for ‘public mobility’ (and thus is off the prop tax roll) – and then used for that – is on the city itself.

        1. “”What part of the city’s tax base for transportation infrastructure are suburbs included in?””

          Kinda hard to say. The MTA has surcharges on all kinds of stuff. I’ve seen a small MTA surcharge on one of my utility bills. It would be an interesting breakdown.

          It’s NY, the odds are the surburbs are forking over some money to fund transportation they don’t take. not the other way around. If I chose to avoid all MTA methods of transportation. I’m still paying the MTA if I hire a cab or Uber. Now NY wants to get more MTA dollars on people’s private transportation.

          1. NY is making the same ‘mistake’ that most other places make re transport. They spend a ton buying buses, paying public sector union drivers, incompetently figuring out which routes are needed/profitable/unprofitable, and configuring all that for political vote-buying. In part at least because current land/prop taxes don’t pay for the capital/land costs so everyone says ‘well let’s figure out how to charge users’.

            A competitive market can do all that operating stuff MUCH better and MUCH cheaper – with the risk for failure also then on that private entity. So eliminate ALL of it from the city’s spending on ‘transport’. Let the city focus on the land itself.

            If I were to start a grid, the city’s responsibility would stop at constructing the stops/depots/etc. And then lease that out to vans/Uber/buses/etc – you want to load here and unload there for y minutes per time, x times per day for the next year – and you want us to help market that on a ‘schedule’ at that stop – that lease will cost you $ABC. Same with private cars for limited-access roads (and more urban arterials should actually be limited-access – to separate them from residential neighborhoods with more non-driving uses of roads).

    2. I personally think that the capital costs of developing/maintaining that grid should mostly be funded via land/property taxes because the value of land in a city is very much tied to quantity/quality of transportation options at that specific location to get around the city.

      So if a person never ever ever uses the subway, but happens to live near it, they should pay for it through annual property taxes? Why?

      Why shouldn’t the subway be paid for 100% through fares and the streets/roads 100% through a gas tax and/or car/bike tax?

      Maybe sidewalks should be paid for through property taxes, if anything. (With that said, annual taxes on primary residences is immoral, IMO.)

      1. What’s interesting is that now if avoid using MTA transportation, say Uber for example. You are still hit with a MTA surcharge of $2.50. Almost the price of a subway fare. But you didn’t take the subway.

        1. Sigh, damn. Well, thankfully I don’t live there and never will.

      2. So if a person never ever ever uses the subway, but happens to live near it, they should pay for it through annual property taxes? Why?

        The value of the land itself increases because of that access option. Same reason school infrastructure benefits homeowners whether they have kids or not. You may not use them – but their existence there gives the NEXT owner the option to use it and the market price of your land is based on what that NEXT owner is willing to pay for it. Location location location is the driver of market prices for land – and a land tax is nothing but a location tax to pay for those things that cities do to increase the value of that specific location.

        Again – try to distinguish infrastructure/capital from operations. I think cities/govt should entirely get the fuck out of trying to operate either transport or schools. In both cases, they should simply act as the landlord of that public space – and develop the space so they can lease it out to private operators (eg bus companies who want to lease loading slots for routes or charter schoolrooms who want to lease schoolrooms for their curriculum/teacher).

        Why shouldn’t the subway be paid for 100% through fares and the streets/roads 100% through a gas tax and/or car/bike tax?

        Because govt sucks at running businesses – and that revenue model is how private businesses run. My model separates the land ownership (ALWAYS a monopoly) from the operating business.

        1. “but their existence there gives the NEXT owner the option to use it and the market price of your land is based on what that NEXT owner is willing to pay for it. ”

          Then they should be paying for it.

          You really are a very stupid person.

          1. And they WILL. That is the major reason why land prices go UP over time.

          2. And if you actually believe that the property/capital itself is what creates the value – then I recommend that you construct the Empire State Building out in the middle of South Dakota. Then sell it and see how much of those construction costs you recover.

      3. With that said, annual taxes on primary residences is immoral, IMO

        The only thing that is immoral about that imo is if the city evicts some old person (lots of property equity but low income) who is unlikely to sell before they die. Anyone who is likely to sell before they die will recoup those annual taxes in either the value THEY personally received or the value (higher price) the next owner is willing to pay for them.

        The city can always avoid the elderly eviction problem by just sticking a lien on the land and then waiting. The worst ‘solution’ is the ‘homestead exemption’. ALL land within a geography needs to be part of that land tax base – homesteads, govt-owned land, non-profit owned land, everything. Otherwise, you’re just creating rent-seeking loopholes for some land – and forcing the tax base onto highly distorting things like income or sales.

    3. I see JFree is still peddling Georgist nonsense about land taxes.

  8. According to reports of Heastie’s comments on Monday as well as a congestion plan put forward by a taskforce convened by Gov. Andrew Cuomo last year, the revenue from any congestion pricing plan would go exclusively toward fixing New York City’s ailing subway system.

    And flying unicorns will be in charge of making sure that happens. No matter how narrowly and strictly worded the bill, it’s going to be interpreted as “spend it however you want”. Literally everything under the sun can be shown to have a connection to improving the subway system and therefore arguably a justifiable use of the funds. And that’s just what the government will do with the money.

    But at this point, if the voters approve a new tax based on the promise that the revenues will go toward one exclusive budget item, they’ve got no right to complain when they find out they’re being swindled on the deal – what’s the saying? “Fool me once, shame on you, fool me twice, shame on me, fool me a thousand times, I’m retarded.”

  9. See, this is the sort of thing that is just baffling. NYC is a blue city, has been a blue city for a very long time. I imagine most New Yorkers are actually quite proud of their city as well, including its subway system. Why isn’t there more willingness on the part of New Yorkers to pay the taxes to fix the subway? It’s not like they are, in the main, opposed to taxation. Does the tax money just get siphoned off to corrupt purposes? Is there no one in charge of making sure the money gets to the repairs? I understand that the NYC city council is larger than some state legislature chambers. Why isn’t there some committee or somesuch to keep tabs on the transit authority to make sure this sort of thing happens? The current implementation of blue state (or blue city, here) governance is its own worst enemy. We should be thankful that they are so bad at running things, imagine what support for Team Blue would be like if they were actually competent at their jobs!

    1. See, this is the sort of thing that is just baffling. NYC is a blue city, has been a blue city for a very long time. I imagine most New Yorkers are actually quite proud of their city as well, including its subway system. Why isn’t there more willingness on the part of New Yorkers to pay the taxes to fix the subway?

      Progs claim to love the poor but are notoriously less generous with charitable donations than conservatives.

      You’re assuming that the Left actually believes what they are saying.

      1. Progs claim to love the poor but will have no problem with charging them more than $10 more, just to drive in midtown and below.

        1. They love the poor in the same way I love zoo animals. Good to have access to when I want to see them, but I don’t want them freely wandering around my neighborhood

      2. “”New Yorkers are actually quite proud of their city as well, including its subway system. “‘

        No one that rides the subway daily is proud of the subway system.

      3. This isn’t about helping the poor. Do you think only the poor ride the subway? This is just about people being able to get around town, rich and poor alike.

        1. When was the last time you saw a rich person on the subway?

    2. Does the tax money just get siphoned off to corrupt purposes?

      I think you know the answer. It’s a combination of corruption and incompetence, aka The American Way.

      1. The money goes mostly to salaries and benefits for the workers who don’t do much work. There is no money leftover for maintenance.

      2. Because they are actually good at their jobs, which is to get reelected.

  10. Congestion tolling depends on whether those drivers need NYC more than NYC needs them.

    Is not congestion pricing one of the objections from the Left about Uber?

  11. ANOTHER reason to never visit NYC.

  12. For anyone interested in the sordid history of transit in the US (railroads, streetcars, buses; urban and interstate), Romance of the Rails is a fine fun history, sprinkled throughout with wondrous tales of government intervention which has never worked the way they expected. The kindle version is only $6 and its graphs and charts are readable.

    1. The history of the financial scam that was the transcontinantal railroad is interesting reading. The truth is there wasn’t yet and economic need for a railroad to California. There was no way to make money on it it. That is why the government had to subsidize it. Even with the subsidies and giving vast amounts of land to the Central and Union Pacific railroads, it still was a money loser. That didn’t matter to the owners of the railroads, however. They just formed a shell company called Credit Moblier which acted as a contractor for all of the construction. They then skimmed huge personal profits from the construction and left the two companies and their shareholders broke.

      1. It’s covered, along with the Great Northern and Mr Hill building a transcontinental RR of their own with private funds.

        The funny part is urban transit. Horses buses, first hated, then embraced as a tax source. The horse rail cars, hated as competition to the horse buses, then embraced as a tax source once proven popular. Repeat with electric rail cars, electric trolley street cars, internal combustion buses, etc. The only hiccup was jitneys, private people driving their Model T buses, who quit picking up passengers once taxes, because by that time the cities were getting into the transit business themselves and had no desire to keep taxes low enough, just wanted rid of the competition. Then the return of rail transit because of government boondoggles, and the light rail mess we have today.

        Fascinating stuff, all over the last 150 years, the cycle repeating every decade, nobody learning anything.

        1. The truth is that a city as dense as New York City makes no sense and is a relic of the 19th Century. Before railroads, people had to live close to their jobs. Also, people were poor. If you were not on a farm or rick, the idea of having any land on your own was unattainable. So people were crammed into tenements close to the factories where they worked. Railroads and street cars relieved some of that but you were still pretty limited on where you could live.

          Then in the 20th Century the car came along. On top of that people got more wealthy and could afford a little bit of land of their own especially now that they didn’t have to live so close to their jobs. This is why cities like Dallas or Pheonix or LA that grew up in the 20th Century look so different than cities like New York or Boston. If the market were allowed to play out as it should, there shouldn’t be a city like New York in this country. The only reason there is is because we subsidize mass transit and make commuting into it artificially cheap. Get rid of the subsidies and mass transit would go broke. When that happened people would move out of Manhattan and the jobs and businesses would go with them until you had a population density that made sense within the market.

          1. Yup, detroit is what would happen to NYC if New York state let manhatten be subject to free market principles of housing* and transportation.

    2. Do they include the legend about how everybody supposedly loved the wonderful electric interurban rail systems until the evil automobile companies conspired to destroy them?

      1. It was GM and the evil oil companies. GM wanted to sell buses it was making.

        I know people who actually believe that shit.

  13. But depending on regardless of how it’s implemented, congestion pricing in New York could will end up just being another government cash grab.

    FTFY

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