KOMANOFF: Congestion Pricing Carveouts Will Steal Millions of Hours and Billions of Bucks

Exempting just 10 percent of CBD trips from congestion fees will reduce the pool of capital available for transit improvements by $1.2-$1.5 billion, shrink driver time savings by 5 percent, and cost drivers and transit passengers a combined 16 million hours a year.

There is no carveout for this toll, so there should be no carveout for a toll to get into central Manhattan. Photo: MTA
There is no carveout for this toll, so there should be no carveout for a toll to get into central Manhattan. Photo: MTA

With Albany set to approve congestion pricing, the talk has turned to carveouts — discounts or exemptions for supposed hardship cases. And boy, lots of categories are being floated. Excluding total non-starters like exemptions for Manhattan residents (or residents of all five boroughs!), I count five:

  • exemptions for tolls paid on “upstream” bridges like the Henry Hudson, the Triborough, and even the George Washington and Tappan Zee
  • exemptions for low-income car owners
  • exemptions for “essential” city workers’ trips in private cars (NYPD and FDNY vehicles are already presumed exempt)
  • exemptions for vehicle trips to medical/health facilities
  • exemptions for vehicle trips by people with disabilities.

Almost everyone feels entitled to a carveout, but carveouts are an awful idea. As sure as there’s placard abuse, there will be carveout abuse.

“Any carveout can be exploited or widened,” Ben Kabak (@2AvSagas) pointed out on Twitter this week. Exempt or discounted E-ZPasses will be shared with family and friends. Drivers who didn’t qualify will overwhelm the toll administrators with spurious explanations. The system will be gamed.

Administering the carveouts will be costly. New bureaucracies, perhaps one for each category, must be created, staffed, monitored, investigated, and so on. Goodbye to another chunk of the transit-earmarked revenue that advocates fought so hard for and legislators signed off on.

There’s loss of trust, too. Congestion pricing, a brand-new thing on these shores, rests on the principle that every vehicle contributing to the slowing of traffic should pay a charge to mitigate said traffic. Handing out exemptions is bound to undermine this logic, breeding resentment and further eroding compliance.

Now let’s look at the numbers. No one knows how many vehicle trips into the congestion zone might be ruled exempt, so I constructed a hypothetical: I decreed that 10 percent of all auto trips into the Manhattan central business district will be toll-free. The results are alarming, as you can see by comparing the BTA’s summary dashboard for congestion pricing with a straight-up version of Fix NYC, with no carveouts:

Dashboard from 'Results' tab _ for Higher-Range Fix NYC _ 28 March 2019 _ corrected 4 April 2019

And here’s the same plan with carveouts covering 10 percent of eligible trips:

Dashboard from 'Results' tab _ for Higher-Range Fix NYC w 10% carved _ 28 March 2019 _ fixed 4 April 2019

Here are the key differences:

  • Net annual revenues that could be invested in better transit shrink by $100 million a year ($1.82 billion vs. $1.92 billion), a difference that means $1.5 billion less for capital spending. A conservative estimate of the impact that doesn’t take credit for higher farebox revenues, $80 million a year, could still bond $1.2 billion, enough to outfit an entire subway line with modern signals that cut 20 percent from the duration of a typical subway trip;
  • Average driver speeds in the CBD rise only 19.4 percent instead of 20.8 percent if there are carveouts. So the 10 percent carveout shrinks driver travel-time savings from congestion pricing by 7 percent.
  • All travelers — drivers, truckers, straphangers, bus riders and taxi and Uber/Lyft users — give up 44,000 hours a day of time savings. Over the course of a full year, that’s 16 million saved hours stolen from commuters to service carveouts.
  • City residents, workers and visitors lose nearly $300 million dollars a year ($3.43 billion vs. $3.71 billion) in congestion pricing’s promised net benefits of saved time, improved health and fewer deadly crashes.

What about the carveout claimants? Viewed in isolation, they have a point. But transportation in coveted and crowded Manhattan is more than a collection of separate trips, it’s an interactive ecosystem in which each trip affects hundreds of others. As I wrote here a year ago, “With the exception of overnight hours, each minute that a vehicle is snaking through the Manhattan core is prolonging similar vehicle trips by a total of 2-2½ minutes. In effect, ‘my’ vehicle’s occupation of Manhattan street space acts as a force multiplier of lost time for other vehicles on Manhattan streets.”

In this light, granting much weight to demands for carveouts is too great a stretch, save for people with disabilities. But even there, subsidizing ride-app services like Uber, as congestion pricing grass-roots campaigner Alex Matthiessen suggests, seems more proportionate and equitable than exempting a license plate or E-ZPass. (This approach can also help smooth the coming shake-out in the app-based vehicle sector if, as I have urged, congestion fees for Uber and Lyft are rationalized with time-based surcharges that account for “trawling” as well as passenger time in the Manhattan taxi zone.)

The lesson is clear: carveouts, like most perks, are not a victimless privilege. The impacts may seem diffuse, but they accumulate quickly. If not tightly contained, carveouts will be a direct attack not just on congestion pricing’s ethos but on its benefits as well.

Methodology: The first dashboard is taken directly from the BTA spreadsheet (downloadable Excel file), running the “Fix NYC Higher-Range Plan” (you can switch scenarios in the Results tab). The second dashboard modifies that scenario by using the BTA’s new “Carveout,” switch, which is item #14 in the spreadsheet’s Policy Levers tab. You’ll do that by changing the value of Cell G85 in that tab from its default value of 0%, to 10%. You’ll also reduce the current values in Cells G192 and G195 in the Policy Levers tab by $80 million to reflect the “immediate” reduction of that amount in annual congestion revenues that results from the first set of changes.

This revised version fixes a mistake in Komanoff’s BTA spreadsheet that caused the post to overstate the impacts of carveouts by a factor of two. That mistake has now been fixed. We apologize for the error in the original post.

  • Sassojr

    BTA still isn’t validated by an independent agency (don’t equate praise with scientific validation).

    “Congestion pricing, a brand-new thing on these shores, rests on the principle that every vehicle contributing to the slowing of traffic should pay a charge to mitigate said traffic.”

    So… Your solution is to ignore what other cities have done, ignore what went wrong in other cities, and charge proven (with actual published science) congestion and pollution reducing two wheeled vehicles.

    http://www.commutercars.com/downloads/CommutingByMotorcycleStudy.pdf

  • redbike

    Almost everyone feels entitled to a carveout, but carveouts are an awful idea. As sure as there’s placard abuse, there will be carveout abuse.

    This!

    For those opposed to congestion pricing, carveouts are a passive-aggressive death-by-1,000-cuts.

  • Larry Littlefield

    Kind of like the Trump Administration with Obamacare.

    They want to pass congestion pricing, screw it up so bad they make it fail, wreck transit, keep driving, and say “I told you so.”

    Except these are Democrats. What are they doing collecting the highest state and local tax burden in the country in exchange for services that fail?

    First they let the subway deteriorate to the point where most people begrudgingly are in favor of paying even more. Then they set out to exempt all their special interest groups — because those people don’t want to pay.

    And you wonder why I dislike the Democrats so much. That organization should have a special deal for New Yorkers allowing them to join the Democratic Party of some other place.

  • Joe R.

    Actually, both parties wrecked Obamacare while the legislation was being drafted:

    https://www.washingtonexaminer.com/lindsey-graham-obamacare-was-designed-to-fail

    Take for example the exchanges, and the idea that people like me are supposed to select an insurer. Good luck with that. Even though I couldn’t afford to buy insurance, just for kicks I went on the NY exchange site. I’m an Ivy League graduate. I couldn’t make heads or tails of what I was supposed to do. How exactly does one select an insurance company? Based of what? Read though reams of legalease perhaps? Or listen to their advertisements which really tell you nothing important. The bottom line is the average person isn’t qualified to pick an insurance company.

    Another thing which irked me was the fact all the plans included coverage for things I would never need. Why does a 50-something male need prenatal coverage? I can’t have a child, and I’m never going to be in situation where I would have a significant other who might. I would basically be paying for a lot of extra coverage I don’t want and don’t need. Why couldn’t I just get a catastrophic policy which would only cover stuff like cancer or a heart attack?

    Then there was the individual mandate. Sure, Trump killed it but Obamacare will implode whether he did or didn’t. It would just take longer with the mandate. The mandate basically struck me as a tax for being alive. The comparisons to car insurance were nonsensical. I can opt out of car insurance by not owning a car. According to the law, there was no way to opt out of paying for either insurance or the penalty, unless the cost of insurance was deemed “unaffordable”. It turned out the government actually agreed with me on that when I checked the appropriate box on form 8965. Still, if I had made significantly more, or insurance cost a little less, they may not have, forcing me to pay a penalty for not buying something I don’t want and really don’t need. I joke with people and say my bike is my health insurance. Our family is basically healthy. I don’t know anyone who had serious health issues not due to lifestyle before they were old enough to qualify for Medicare. Yes, my late father had his first heart attack at 54, but his eating habits, obesity, smoking, and lack of exercise were the reasons.

    No, I don’t like the Democrats, either, especially in New York. As you say, they give deals to all their special interest groups, then stick the bill to everyone else. The only reason I’m staying in NY is because at this point I most likely won’t have much income in the foreseeable future, so I won’t be paying for their largess. If that situation changes, I’ll consider going elsewhere. Alaska actually sounds pretty good. No state income taxes, not hot summers, and they actually send everyone a small check each year.

  • Larry Littlefield

    Yes its a terrible plan, but at the federal level I blame the Republicans more. Much more.

    They adopted a goal of hurting the country because they believed (correctly) that it would be good for them politically by making the Democrats look bad.

    But deciding to vote no on ANYTHING and not put forward anything of their own, the forced the better Democrats to basically pay off all their most selfish members and interest groups.

    Even at that, it’s an improvement from what had been.

    The Republicans also refused to go along with, or even suggest, improvements. Why? Because they represent Generation Greed, and Generation Greed knows it will get its Medicare. And to hell with those coming after.

  • redbike

    And this relates to Congestion Pricing and Livable Streets how?

  • redbike

    And how does this relates to Congestion Pricing and Livable Streets?

  • Joe R.

    It does in a convoluted, tangential way because of the way Democrats run this state, favoring their special interest groups over the public good. Congestion pricing might end up being intentionally designed to fail. Or even worse, most of the monies collected might not go to the MTA. Call me a skeptic, but it’s hard for me not to see some scenario where the TWU gets retroactive pension increases after congestion pricing is passed, then the UFT complains about not getting “their share”, and they get retroactive pension increases also. Since we’re insisting on bonding congestion pricing revenues, instead of using them as they come in, once that money is spent we’re not getting another dime. 30 years down the road drivers will still be paying congestion fees, but nobody will be deriving any benefit from it. The subways never will have been fixed because the money was spent on other things.

  • Sassojr

    Since the primary purpose of “congestion pricing” is to find yet another revenue stream for the MTA to bonds against and accrue more debt…

    And this relates to congestion how?

  • kevd

    this is actually one of Larry’s least tangential posts!

  • Jeff

    I’m against carve-outs, especially because of their potential to breed resentment and the like, but these numbers don’t seem _too_ particularly shocking or compelling–there seems to be a linear relationship between exempted vehicles and effects on revenue and congestion.

  • motorock

    If we have to congestion pricing correctly, we should just follow what the Europeans did with exemptions.

  • motorock

    Yup. They suddenly forget science or precedence or Europe when it comes to discussing exemption for two-wheeled vehicles. While an scientifically unproven and fundamentally flawed “traffic model” gets touted all the time. SMH

  • Larry Littlefield

    The Republicans are trying to wreck Obamacare, which they don’t like, by screwing it up.

    Same with the state legislature and congestion pricing.

    That’s the analogy, and I think it is dead on.

  • Carve outs are like NIMBY, it’s good for everyone else but me.

    In Manhattan, i have noted a correlation between opposition to congestion pricing and the availability of low cost parking. In particular residents of large residential complexes with subsidized garages are the most vocal. Stuyvesant town, penn south, etc…
    it goes to show that parking policy looms very large in all decisions.
    Raising curbside parking fees across the board would make all future decisions on street design and congestion much, much easier. It also could fund a substantial increase in the City’s contribution to the MTA

  • Larry Littlefield

    See below.

  • Lincoln10023

    The trouble with the Governor’s bill, which was included in his budget submission, is that it already identified carve outs . For example, a car coming in from NJ using the Lincoln or Holland Tunnel, has their toll applied as a credit. At current toll rates and proposed congestion fees that driver doesn’t pay anymore and will continue to drive into the CBD and congest the streets. On the other hand, a Manhattan driver leaving Manhattan who needs to enter the zone to leave through the nearest crossing has to pay the congestion fee when leaving and the toll upon return .The legislation does not spell out any offset upon coming into Manhattan for this motorist .This truly is unfair and should be fixed before the bill is passed. If left as is, then these Manhattan drivers will divert North to the GWB, causing more traffic and pollution by travelling a longer distance to an already congested crossing . Also, a lack of a westside north/south pass through will divert cars to the east side where the bill already has created that north/south carve out. This raises another major problem with the Bill , which is a lack of traffic analysis from all the diversions caused by the congestion fee and what measures are to be taken to correct it . Where is the EAS or EIS analysing the impact of this project? The Governor’s proposal has been floating around for more than a year and has had plenty of time to analyse traffic diversions and identify some suggested plans to alleviate t. Finally, there is also a lack of quantifiable goals, with the exception of “congestion fee money collected”. If increased traffic speed is a goal, then what speed are we trying to reach and when do we expect to reach it by? How much will the congestion fee have to be in order to attain the goal? So far, all that has been discussed is a 10 or 15% improvement in traffic speed, which at best increases midtown traffic speed between 0.5 to 1.0 mph . Not much of an improvement for bus riders, etc., if buses are currently moving at 5-7 mph. So there must be a goal and another phase to the plan and congestion fee . It’s time someone releases that information or just do the analysis of it if it hasn’t been done .

  • Stan Wagner

    This plan will end up in the courts. But really, they have no plan. What happens if I drive into and out of the zone a couple of times a day? There are plans for exemptions to those with disabled parking permits. How do those vehicles get separated from the rest of traffic entering a zone? And, if they use the European plans, motorcycles should be exempt. The only thing they have planned is the name. It’s about saving the MTA’s corrupt ass. Not about congestion. Raise the fares and be done with it. It’s going to happen anyway

  • Stan Wagner

    It doesn’t! It’s about funding the poorly run MTA

  • Stan Wagner

    The mayor has already mentioned exemptions for city workers. Bigger issue is how to identify exempt vehicles as they pass through the tag readers.

  • Larry Littlefield

    Lets say for the sake of argument that I were able to divert money from your paycheck to some more politically powerful priority, and told you to just finance your household budget on the credit card.

    And that since you weren’t spending real money, you should shop in stores where everything was overpriced, because the people overcharging were friends of mine.

    You did this for many years and everything seemed fine — until you were so deep in debt you couldn’t borrow anymore.

    Would you say that in that circumstance you were corrupt because you needed more money?

    Silly analogy to non-government? Hardly. It’s our entire economy in recent decades.

    https://larrylittlefield.wordpress.com/2018/09/06/rising-u-s-debt-is-the-real-cause-of-the-u-s-trade-deficit-and-inequality/

    And yes, fares are going to raised anyway. The hole is deep, and not just at the MTA.

  • Sassojr

    Not corrupt “because” you need more money… Corrupt AND you need more money.

  • Larry Littlefield

    The corruption isn’t where you think it is. It’s mostly on the LIRR, and in capital projects, and part of retroactive pension increases that weren’t paid for at the time.

    And it isn’t the criminal sort of corruption. It’s the lobbying in exchange for political support type. And most of the beneficiaries live in the suburbs, even those cashing in in the city. Or used to live in the suburbs and have retired early to Florida.

    I’ll say it again, the NYC subway’s operating costs are below average for U.S. heavy rail per vehicle revenue hour. For what other NYC public service can you say that? Schools? Medicaid? Police? Data on transit below.

    https://larrylittlefield.wordpress.com/2017/05/11/metro-ny-transit-costs-data-from-the-2015-national-transit-database/

  • Joe R.

    Bus speeds would improve much more dramatically than 0.5 to 1 mph if we had enforced bus lanes and traffic signal priority. That should be part of the plan as well.

  • motorock

    I think NYT in 2017 showed pretty effectively the profligacy of the MTA. Esp when compared to comparable European agencies doing the same work, for a sixth of the price in some instances. They also addressed all the skeptical points about their insurance etc too and it was till too high in MTA. Let’s not try to defend the MTA here- it is corrupt, it is inefficient and it is bloated. Operating costs may be “below average” of US heavy rail or whatever, but it is still damn high- perhaps the other agencies in the US need to be checked for corruption and bloat too. We know how greedy self-interests have been directing all kinds of expenditure in the US. Also, lets not forget the governors successively taking away money from it because they thought that the MTA was “doing fine”.
    If we are going to do European style congestion pricing, we need to do the same exemptions and up the level of efficiency on the trains at the same time.

  • kevd

    what am I, your fucking secretary?
    you have no problem copying and pasting 40,000 word treatises in every other post, but I get “see below”?!?!
    That’s bull-shit.
    Paste a shitty graph in here Larry, PLEASE! I beg of you.

  • Larry Littlefield

    Rosenthal got some of the data from me on actual NYCT costs.

    The big excess costs are on the capital side, not the operating side. East Side Access for the LIRR for example.

  • dbs

    with city worker private vehicles getting exemptions, and no exemption for two wheeled vehicles, let’s just pretend we are enacting congestion pricing. city workers would be the strongest proponents of improving the subway, if only they were forced or encouraged to use it. hopefully congestion pricing will pass without these stupid disappointing carve outs, but government seems to be good at widely missing the boat, afraid to upset archie bunkers afraid of change. where are the brave strong politicians?

  • Larry Littlefield

    In fairness city workers in general have different needs, as mass transit doesn’t work well with regard to trips from widely distributed homes to widely distributed workplaces. But with regard to city workers who work in Manhattan, you are correct.

    The issue is cultural. The city workers who matter politically think of themselves as a different class of people relative to the serfs. Basically the Tammany Hall machine relocated to the suburbs, but continued to hold many of the public jobs in the city. And look down on the serfs using transit and riding bicycles.

    If separate data was available for those working directly for elected officials (state gov especially), for the agencies were old-time patronage is concentrated (such as the courts), for managers, and by generation, you’d see this clearly.

    Here is one thing that could be looked into. Gradually, more and more public employee unions have “won” the right not to have to live here, pay the high taxes their benefits impose, and settle for the public services their civil service provisions have allowed them to provide, and their members have moved to the suburbs. Not it’s almost all of them.

    Managers, however, in theory still have to live here. But they have been getting “special permission” not to for decades. What share of managers have that permission?

  • Joe R.

    One more thing to add to your analogy:

    When you bought stuff, you would often be billed more for it years after the purchase (this is an analogy to the retroactive pension increases).

  • david

    I heard that motorcycles are exempt from congestion pricing. I see this as increasing noise on our streets. Sorry motorcycles, not a fan of most bikes noise.

  • Stan Wagner

    As a rider, I have to say not all motorcycles are loud. Most likely, what you’re hearing, is a bike with an illegal aftermarket exhaust pipe. Motorcycle DO lessen congestion. That’s been proven in many cities, worldwide. But, this isn’t about congestion. It’s about funding the poorly run and corrupt MTA. The thing to watch is where the money is going. Is it going to fund high salaries and pensions? Or, will it go to modernize the system?

  • Stan Wagner

    Why should any city worker be exempt? How will they be singled out, in traffic. What about EMTs? The disabled with parking permits? How will all these vehicles be identified as being exempt. I could retire next year but wasn’t planning on it. I may change my plans.

  • 5yak5

    I can’t wait to see the news stories of old disabled people who have to skip their medication in order to afford to come into town for their doctor’s appointment. Good luck with that optic.

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