Eight Reasons Why Congestion Pricing Goes Great With the Fast Forward Plan to Fix NYC Transit

Photo: Timothy A. Clary/AFP/Getty Images via Wikimedia Commons
Photo: Timothy A. Clary/AFP/Getty Images via Wikimedia Commons

What will it cost to implement Andy Byford’s Fast Forward NYC plan to modernize NYC Transit? Initial estimates range from $19 billion to $37 billion. Whatever the final price tag, a trainload of new capital will be needed to pay for it. Congestion pricing revenues may not cover every cent, but they’ll need to be the centerpiece of any funding package.

After this year’s Albany budget negotiations came and went without Governor Cuomo putting any muscle behind his proclamation that congestion pricing’s time had come, the Byford plan has set the stage for 2019.

The electoral pressure will be off, with no contests for municipal, state, or federal office in November to send politicians scurrying for safe ground. There’s a congestion pricing proposal waiting in the wings — the recommendations from Cuomo’s own Fix NYC panel (the numbers in this post are based on a version of those recommendations I call the “Higher Range Plan”  — see note below). And in Byford, there’s a well-respected leader at NYC Transit the public can trust to put congestion pricing revenues to good use.

During this window of opportunity, advocates will need to communicate the case for congestion pricing clearly and firmly. Here are eight benefits I see as central.

1. Revenue: $1.5 billion each year

The Fix NYC Higher-Range Plan will net an estimated $1.5 billion a year — more if we count turnstile clicks from new subway trips eventually attracted by better service, less if we deduct revenues already in the pipeline from for-hire vehicle surcharges mandated in the 2019 state budget.

2. Upfront capital: $20 billion

The annual “stream” of congestion revenue can service bonds to pay for the new signals and other enhancements in the Fast Forward plan. Interest rates on those bonds will likely be between 4 and 5 percent, a range implying the annual $1.5 billion in revenue can service $22 billion to $26 billion in new capital investment. Even playing it safe and lowering that number to $20 billion, congestion pricing is clearly capable of shouldering most of Fast Forward’s capital cost.

3. No other funding mechanism comes close

Raising $1.5 billion a year without congestion pricing means tacking an extra 0.7 percent onto the 8.875 percent total sales tax charged in the 12 MTA counties, or boosting gasoline taxes in those counties by 50 cents a gallon. Or charging each car and truck registered in the five boroughs an additional $800 a year. Or doubling the rate of de Blasio’s millionaires tax, which would generate only $750 million a year as the mayor has proposed it.

4. Economically progressive

The Community Service Society, a venerated champion for poor New Yorkers, dismembered the “regressive” rap on congestion pricing last October with a report documenting that nearly 40 times as many low-income families will benefit from congestion pricing’s transit improvements as will regularly pay the new congestion tolls. End of story.

5. Geographically equitable

Past congestion pricing proposals raised the lion’s share of revenues from people living outside Manhattan. But current plans like Fix NYC and Move NY flip that calculus by assessing surcharges on yellow cab and Uber trips in the Manhattan taxi zone. Well over half of all for-hire vehicle trips in that zone are paid by Manhattan residents. As the pie chart shows, Manhattanites would kick in as much Fix NYC Plan revenue as residents of Brooklyn, Queens, and Staten Island combined. As they should.

BTA Incidence Pie Chart for Fix NYC Higher-Range Plan _ 2 April 2018

6. Won’t crush the trains

This point is so counter-intuitive I triple-checked it: Congestion pricing would cause the number of people riding subways during the 8 to 9 a.m. and 5 to 6 p.m. peak hours to rise only 1.1 percent. On average, a subway car with, say, 130 people would need to squeeze in just one or two more. While that’s not something to wish for, it’s no strapocalypse.

The reason is simple: Car commuting is very spatially inefficient, and it’s already dwarfed by subway commuting. So while it will be noticeable on the streets when congestion pricing reduces the number of rush hour car trips by about 10 percent, the people who switch to trains will be a drop in the bucket of subway ridership. (Full details are in my January post, Why Congestion Pricing Won’t Overwhelm the Subways.)

7. Faster travel above ground

The promise of faster vehicular travel to and within the Manhattan core has taken a back seat in NYC congestion-pricing discourse — when it’s discussed at all. That’s partly due to the salience of bad transit as an issue affecting New Yorkers, and partly on account of the London congestion charging system’s ambiguous impact on traffic speeds.

But the promise is striking nonetheless: an immediate 12 percent rise in traffic speeds in Manhattan below 60th Street, swelling to 20 percent after five years, as the congestion pricing revenues transmute into better subway and bus service that draws more commuters from their cars. (Projected speed gains at gateways to Manhattan like Long Island City and Downtown Brooklyn are about 40 percent as great.) And the general thinning of traffic will also bring safer streets and embolden more New Yorkers to take up active (and healthy) transportation like cycling.

8. Fairness for for-hire drivers

What won’t speed travel very much are the surcharges on yellow cabs and Ubers mandated in Albany’s recent budget and set to begin next January 1. As I’ve written, without a complementary cordon toll on private cars and trucks, the new standalone for-hire vehicle surcharges will disappear 10 million trips a year while shaving only 4 percent off travel times in the Manhattan core.

Creating such a meager public good entirely on the backs of hired drivers would be questionable policy in good times. In these desperate times for cab drivers, it’s downright immoral not to couple the surcharges with a cordon toll that causes for-hire trips to rise because travel via taxis and Ubers will be faster. That won’t make cab drivers flush, but it at least won’t worsen their dire straits.

Seven months remain until the start of the 2019 legislative session, and ten months until Albany votes on its next budget, with the opportunity to include a transformative traffic pricing plan. That’s time enough to pound these points in social media, editorials, and other public conversations and create an irresistible groundswell. Let’s start now.

Author’s note: All numbers here are geared to what I call the Fix NYC Higher-Range Plan — one of three Fix NYC toll and surcharge combinations that I’ve programmed into my BTA spreadsheet model, alongside two versions of the Move NY (Gridlock Sam Schwartz) plan. As its name signifies, this plan lies at the high end of the more than 100 pricing packages in the Fix NYC report. It charges private cars a round-trip toll of $11.52 (same as for a round-trip on an MTA bridge or tunnel) to enter the Manhattan CBD during 14 peak-traffic hours each weekday and 10 peak hours on weekends and holidays, and adds hefty surcharges on for-hire vehicle trips ($2.50 for yellows, $2.75 for Ubers et al.) that traverse Manhattan south of 96th Street.

  • Joe R.

    Question: Have you or anyone else played around with the toll to see what effect increasing it would have on travel speeds, congestion, and total revenue? My thoughts here are similar to how a company might price a product, except in this case there’s no manufacturing cost. The general idea should be to maximize revenue. If you increase the toll, the number of trips will decrease. Eventually further increases in the toll will fail to generate more revenue. Where does that inflection point lie? $15? $20? $100? For the sake of transit maximizing revenue is what we really want to do here. Any other effects would be secondary even if they’re also beneficial.

  • eugenefalik

    The effect on traffic will probably be insignificant.
    Most of the traffic below 59th Street consists of government owned vehicles or those with “official” placards, taxis / “for hire” vehicles, and trucks. The fee will be insignificant for those such as Mike Bloomberg.
    Recent traffic congestion is the DIRECT RESULT of the Bloomberg / Sadik-Kahn / de Blasio / Trottenberg policy of street narrowing for bike and bus lanes. Whether or not that is a good thing time will tell, but almost all of the traffic problems are due to criminal activity by NYC DOT commissioners turning traffic engineering over to kids with city planning degrees instead of licensed Professional Engineers.

  • Larry Littlefield

    “The annual “stream” of congestion revenue can service bonds to pay for the new signals and other enhancements in the Fast Forward plan. Interest rates on those bonds will likely be between 4 and 5 percent, a range implying the annual $1.5 billion in revenue can service $22 billion to $26 billion in new capital investment. ”

    The “fast forward” plan accelerates signal replacement somewhat over ten years, but not that much. The signals would be replaced in the core areas, but not elsewhere, and at the end of the decade the signals elsewhere would be 10 years older.

    There would still be a need for ongoing normal replacement.

    And all the FUTURE congestion pricing revenues would already be spent.

    You keep assuming this is OK. That what happens 10 years from now doesn’t matter. But we are where we are because the same decision was made 10 years ago, and 20 years ago.

    What will be left when Generation Greed is finished? All our tax dollars will be paid out of the country as interest on foreign investment, or used to pay for Generation Greed’s unfunded and underfunded old age benefits, leaving ZERO for public services and benefits.

  • Larry Littlefield

    Charles, can you please understand that fact that if your advice had been taken 10 years go and congestion pricing had been implemented then, the subway would still be in the state it is in but the next 20 years of congestion pricing revenue would already be spent?

    People just don’t want to deal with the enormity of the situation we’ve been left with — and this is just part of it.

  • Komanoff

    I guess you’ve missed my two dozen posts with invitations to download my toll model, but what the hell, here it is: http://www.nnyn.org/kheelplan/BTA_1.1.xls. Have fun.

  • Komanoff

    No, I don’t agree that $20-$25 billion in capital investment initiated a decade ago would not have made a dent in subway service frequency and quality. Or have I misrepresented your position?

  • Larry Littlefield

    It would have funded ongoing normal replacement for a decade, and then been gone.

    Instead they created the payroll tax. Where is that going? Bonded against and spent, along with all the other revenue streams.

    I don’t disagree with congestion pricing. I disagree with spending all the future revenues up front. What it brings in each year is what is available to be spent each year. Nothing more.

  • The MTA’s management needs to be assessed before any real change is done. Paraphrasing the Governor’s quote about NYCHA, “giving money to the MTA is like throwing it out of a window.”

    People have every right to be concerned about where that money is going to go, but they also have every right to see improvements in transit that isn’t getting any cheaper to ride.

  • motorock

    Sorry Mr Komanoff, you choose to always push your agenda but living in south Manhattan with all your privilege, never having to spend much time on a subway and being able to get to your destinations just riding a bicycle, you don’t know the pain of the people from the boroughs or the realities they face- or to know why congestion pricing right now is not the answer. Even more so because you also didn’t say a single word about a complete restructuring of the MTA- an inefficient corrupt organization plagued by profligacy. You just want to keep feeding more money to the the MTA- the more you feed it, the more it will waste- it’s not a theory, it has been the reality over the past many years.
    You can push all your numbers but until you fix the MTA all that means nothing. Push for things that will make change- not your fantasy of a car-free Manhattan when millions do not have a efficient way to get to work like you do.
    You need to push for alternate transportation so that commuters have options NOW! Think about the masses, not only through your privileged thinking cap. Also, it is very suspicious that you never talk about the MTA management and how inefficient the whole organization of it is- THAT is the root of the problem that has to be tackled first before anything else.

  • Drew Keeling

    It is interesting that projected revenues from the proposed congestion pricing arrangements work out to about the equivalent of “boosting gasoline taxes” in the 12 MTA counties by 50 cents a gallon.

    US Presidential candidates John Anderson (1980) and Ross Perot (1992) both advocated a 50¢ per gallon tax increase. The idea made good sense then (as did Bernie Sanders’ (2016) shallower but broader proposed carbon tax), and still does now. A 50 cent hike would about double the current federal gas tax, but even $1 per gallon is low by international standards. Most of western Europe taxes at well above $3, and enjoys a related lower carbon footprint, more efficient public transit, and a standard of living benefiting from a lower fraction of income going to transportation expenses.

    Such national or international policies are typically slow to be enacted, their benefits accrue only gradually, and the medium term prospects for significant adoption in the USA look largely theoretical. New York City, however, with some help from New York State, has now an excellent chance to act locally, without waiting for national progress to slowly materialize, and in quite justifiable addition to any such eventual nationwide improvement.

    I am favorably impressed with how well thought out the proposed congested pricing plan for Manhattan is, and how it well-balanced it appears to be in spreading widely and fairly its costs and (considerably greater) benefits. The NYC subways certainly need overhauling and upgrading (though what I saw on my last visit two years ago still looked better than what I remember living in New York in the early 1980s), which congestion pricing can of course help fund but not alone guarantee. I nonetheless hope that local leaders will seize this opportunity to improve on past successes, and help make more efficient the use of publicly provided streets and rail transit for the benefit of everyone living in, working in, and visiting New York.

  • John Ferris

    Thank you – said so well. The MTA I believe brings in more revenue then any other public system in a city throughout the world – yet is in a constant deficit annually with forever ballooning debt.

    Also, those in Manhattan, the middle class and poor that live in say affordable housing, will pay the price. Deliveries still have to come in – that added congestion cost will be tacked on to the food costs. The things they don’t talk about. Already the regular delivery trucks pay around $65 just to cross the GW Bridge, and the bigger trucks pay around $105. Let’s tack on another $11 to them – why not!

    Finally, the tolls for the bridges was supposed to go to fix them – yet with all the money they bring in we should see the GW Bridge made of gold and every other bridge as well – yet the money soon after tolls were placed was diverted to the general fund. Same as the lottery which was supposed to pay for education, but yet again goes to the general fund. Who is to say this would be no different? My trust is beyond limited, in fact it is zero.

    As you said – let’s fix the MTA – it’s full of waste with huge overtime of $200k+ a year. They could hire 3 workers and pay them each $75k for the price of that one overtime employee. Why not do that – get more bodies out there fixing things with 8 hour shifts versus overtime. Plenty of ways to fix a system – with the right person at the helm getting rid of all the waste.

  • Chris Gray

    STOOGE your Niggardly Bloomberg Congestive Pricing Below 86 th STREET is a TRAVESTY ! Firstly, WHY is N.Y. THE INFRASTRUCTURAL TOILET BOWL OF AMERICA ?!I asked the syncophant at the WHOREHOUSE IN MORNINGSIDE HTS. Look when was the last time YOUR STUPID STATE even BUILT BUILT a major monumental BRIDGE ? Need a hint ? Go back to the FIRST WORLD TOUR OF THE BEATLES AT SHEA STADIUM !!! When i was in the ARMY that kind of Shoody , Sloppy , SHABBY, SLIPSHOD , Second-rate performance would have been labelled CRIMINAL NEGLIGENCE and DERELICTION OF DUTY ! Actually , to BUILD anything SPEEDILY in your stupid state one MUST have a PENAL PURPOSE : ELECT A CUOMO and BUILD A JAIL IN SULLIVAN COUNTY !EMPIRE ? EMPIRE STATE ? What a colassal JOKE .STOOGE , EMPIRES NEED EMPIRE BUILDERS such as the Peerless , tremendous , Titanic MAMMOTH Master BUILDERand ENGINEERING GENIUS since the 18 th DYNASTY of PHARAONIC EGYPT :Robert MOSES whom Your Stupid State REBUFFED some 60 yrs. Ago and instead SUCCUMBED to the SIREN SONGS of the POST MENOPASUAL SLUT who HATED CARS jane jacobs and the GERIATRIC WEASEL robert caro who still lives in SODOM on 95 th STREET and works part time for the NOXIOUS N.Y. TIMES a paper i reserve for the PARAKEET CAGE .HAD the Crrrrrrritically needed Lower Manhattan EXPRESSWAY been BUILT SODOM would not be SADDLED with the 20 BILLION $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ COSTS per YR. for the Snarled , Clogged , Congested , Blocked , CHOKED , Stopped UP STREETS maybe maybe 20 BUCKS !YOUR VAUNTED Historical Depraved , Debased , DECAYED , Debauched , Degenerated , Degraded CITY would EASILY be the Most PROSPEROUS , MONEYED , WELL-to-DO , SUCCESSFUL CITY on the Planet ! PLUS the CITY of N.Y. would be a THOUSAND TIMES SAFER and a THOUSAND TIMES MORE SANITARY !STOOGE Your STUPID STATE also REBUFFED MOSES Brillant SAGACIOUS JUDICIOUS PERSPICACIOUS PROPHETIC PERCEPTIVE PLANS for the crrrrrrrrrrritically needed Monumental Epochal Prestigious PANORAMIC SCENIC CIRCUMFERENTIAL SIX-MILE VISTA CRUISE across an INLAND SEA , THE MAGNIFICENT RYE OYSTER BAY BRIDGE a UNIQUE Matchless , Distinctive ,Unexcelled ENGINEERING ACHIEVEMENT which would have OBVIATED , Eliminated the EXIGENCY of MILLIONS and MILLIONS of OVERLOADED TRUCKS , BUSSES , VANS from having to TRAVERSE SODOM in THE FIRST PLACE !AGAIN , No wonder N.Y. IS THE INFRASTRUCTURAL TOILET BOWL OF AMERICA. No wonder the COFFERS of your stupid state are EMPTY . Perhaps an analogy from the MEDICAL World will make clear your present DIRE , Dreadful ,Desperate , Disasterous ,Dismal Condition > SODOM because of the CRIMINAL NEGLIGENCE and DERELICTION of DUTY on the part of your BOOTLESS , BLASPHEMOUS , BENIGHTED Capitol in ALBANY now NOW in the INFRA-RED REALITY of the 21 th Cen. has STAGE 4 INFRASTRUCTURAL COLON CANCER ! STOOGE , The CANCER has METASTASIZED and is now INOPERABLE ! YOUR Puny Powerless PATHETIC ,PITIABLE NIGGARDLY BLOOMBERG Congestive Pricing which will NOT ALLEVIATE THE LIVING HELL which the MOTORISTS Must Face every Stinking Day in SODOM and will be about as EFFECTIVE , Efficacious and Efficent as a Fraudlent Doctor Prescribing PERCODANS to a Patient with STAGE 4 COLON CANCER !