Trump Kills New York's Flawed Congestion Pricing Program

Federal transportation officials said that because New York's congestion tolls were really about raising money for mass transit, they didn't qualify for an exemption from the federal tolling ban.

It's gone again.

On Wednesday, the Trump administration withdrew federal authorization for New York's short-lived congestion pricing program that tolls drivers entering a cordon covering lower Manhattan.

In a letter to New York Gov. Kathy Hochul, U.S. Department of Transportation Secretary Sean Duffy said that New York's congestion-priced cordon did not qualify for an exemption to the general federal prohibition on tolling federal-aid highways because it did not provide drivers a toll-free option and because its primary purpose was funding transit, not reducing congestion.

"New York State's congestion pricing plan is a slap in the face to working class Americans and small business owners," Duffy told the New York Post, which first reported on his letter.

President Donald Trump gloated about the policy's demise on Truth Social.

The latest post by the President of the United States. pic.twitter.com/1DTqNiYJ7D

— Yashar Ali ???? (@yashar) February 19, 2025

In her own statement, Hochul—who had issued her own shock suspension of congestion pricing in June 2024, only to revive the program shortly after the November 2024 elections—promised to sue over the cancellation.

MTA, the state agency that runs New York City's subways and would receive the congestion toll revenue, has already sued the Trump administration.

Governor Kathy Hochul responds to President Trump's king post.

"Public transit is the lifeblood of New York City and critical to our economic future - as a New Yorker, like President Trump, knows very well.

Since this first-in-the-nation program took effect last month,… https://t.co/Eijk5ZXi24

— Yashar Ali ???? (@yashar) February 19, 2025

Thus continues the long, troubled, clownish saga of congestion pricing implementation in New York City.

The "cordon pricing program" was first authorized by the New York Legislature back in 2019, with the twin goals of raising money for New York City–area rail transit and reducing traffic in the badly congested areas of lower Manhattan.

The initial plan was to begin charging drivers tolls in 2021, but the program's implementation was delayed by numerous practical and political hurdles.

Because New York would be tolling federally funded highways, the federal government would need to grant an exemption to its general ban on tolling.

The path for doing this involved New York's acceptance into DOT's Value Pricing Pilot Program (VPPP), which allows for a limited number of states to experiment with congestion pricing programs on federal-aid highways.

Before the federal government could admit New York to the VPPP, the National Environmental Policy Act (NEPA) required it to produce an environmental study of New York's congestion pricing program.

A NEPA review is no small order and involved the federal highway officials producing a near-1,000-page report (not counting the multiple appendices) and collecting 28,000 pages of public comments. It wasn't until June 2023 that the federal government finalized its environmental findings.

The finalized report merely kicked off endless rounds of litigation from congestion pricing critics. New Jersey, teachers unions, and more, all sued the federal government for allegedly failing to do a thorough-enough environmental analysis of the project.

Nevertheless, New York barreled ahead with implementation. It installed tolling cameras and formulated actual toll rates—which were initially going to be $15 for the average driver.

Then in June 2024, just a few days before tolls were supposed to go into effect, Hochul made the shock move of suspending the final implementation of congestion pricing.

The program had first been approved when "crime was at record lows, and tourism was at record highs," the governor said at the time, arguing that the sudden implementation of congestion pricing carried the risk of too many unintended consequences.

Soon enough, however, Hochul had a change of heart, and by November 2024, plans were in the works again to start tolling drivers a $9 toll to enter lower Manhattan come January 2025.

Even under the higher $15 tolls, academics were predicting a muted effect of the program on traffic congestion.

In a November 2024 paper, Stanford University's Michael Ostrovsky and the University of Chicago's Frank Yang argued that New York's policy of charging taxi cabs and for-hire vehicles like Uber and Lyft (which make up a significant share of Manhattan traffic) much lower tolls to enter the congestion zone would mute the impact on congestion.

Similarly, Ostrovsky and Yang also say New York's plan to charge full tolls between 5 a.m. and 9 p.m. on weekdays and charge steeply discounted tolls outside that time period will minimize its impact on congestion. Delivery drivers (another major source of traffic) could avoid the full tolls by entering the congestion zone early in the morning and staying in the zone during peak hours.

Preliminary data on the first month of congestion pricing bore out those predictions.

A congestion tracker supervised by Brown University professor Emily Oster found that in the first month of congestion pricing in Manhattan, congestion on bridges and tunnels leading into Manhattan is down but congestion within the priced cordon has remained the same.

"It's having an impact on travel behavior outside the zone but it doesn't appear to be having a measurable impact within the zone. That's a big problem," says Marc Scribner, a transportation researcher at the Reason Foundation (which publishes this website). "What is the purpose of cordon pricing? It is to reduce congestion within the cordon."

Scribner says that the apparent minimal impact on traffic is a product of the Manhattan tolls being primarily used as a funding tool for New York mass transit. The tolls were therefore set to maximize revenue and reduce political pushback, not minimize congestion. The Trump administration therefore has a point when it says that New York's congestion pricing scheme doesn't align with the purpose of the VPPP.

Nevertheless, Scribner says the Trump administration's cancellation of New York's congestion tolls is an example of the outsized powers federal officials have over nonfederal transportation policy.

"This suggests that the federal government has too much authority of states and localities to toll their own infrastructure and implement road pricing. That's really something that Congress should address," he says.