Reporter’s Notebook: Where Were You The Day Congestion Pricing Died (Maybe)?

ALBANY — The two days since "Gridlock Gov." Hochul announced a pause on congestion pricing have felt like a farce, a weird dream or some combination of both.

A day after Hochul's flip-flop, rumors swirled that the governor and her team wanted legislators to hike the a payroll mobility tax on New York City businesses to recoup money as a backstop for the $15 billion loan congestion pricing was supposed to help raise for the MTA's 2020-2024 capital plan.

The PMT is a tax on business payrolls, i.e. worker salaries, which Hochul and state pols already increased last year to fund the MTA's operating gaps. That idea was dead by mid-day as the stakes came into clearer focus: Congestion pricing wouldn't just pay for things the MTA is paying for by itself, it's also supposed to pay for things that Uncle Sam is supposed to help fund — meaning Hochul had also put those those crucial federal dollars in jeopardy.

And so the normally quiet crunch of Albany's end-of-session, which usually involves stuffing a bunch of new laws into a late-night "Big Ugly" omnibus, turned into a very loud screeching calamity this week thanks to Gov. Hochul.

The PMT proposal went nowhere fast on Thursday, with Hochul reportedly looking to the state's general fund to close the gap until legislators come up with some new source revenue when they reconvene in early 2025 — just in time for the politicians to come up with a way to fund the next four-year capital plan.

Hochul's gambit has not gone well, with spirits in Albany only buoyed by me, Dave, showing up to the Capitol to crack some jokes and yell.

General madness

Hochul's plan for the PMT appears dead in the water, leaving a $15 billion hole in the MTA's ongoing capital plan — the largest capital plan in the authority's history, which officials crafted in response to the disaster transit crisis of 2017.

State pols agonized for two years over how to respond to that crisis, eventually settling on congestion pricing. Without that money, they're back where they were eight years ago. The MTA board will be forced to cancel projects, kicking key priorities like station accessibility, signal modernization and maintenance down the road.

It's "the opposite of sound financial management" — and would essentially require the board defund its own agency, Reinvent Albany Senior Policy Advisor Rachael Fauss told Streetsblog.

"If the Legislature fails to approve an alternative revenue source, the MTA board will be asked to vote against their own financial interest, de-funding their own agency of $15 billion in capital revenues," Fauss said.

"MTA Board members must sign an oath and acknowledge that he or she understands his or her role, and fiduciary responsibilities, including to 'ultimately apply independent judgment in the best interest of the authority, its mission and the public.'"

With the Hochul's initial funding alternative floating lifeless in pool out behind the governor's mansion, her team came back with a new, somehow dumber idea — to take up to $1 billion from the state's general fund to tide over the capital plan for the rest of 2024, then come up with a more recurring revenue stream when lawmakers return to Albany in 2025.

It's unclear if that will pass legislative muster, and the money may or may not be bondable. If it was, it would leave the state on the hook for decades to keep appropriating the money from the general fund, or risk a lawsuit from pissed off and Constitutionally-protected bond holders.

You'll find out when we want you to find out.

In the absence of a single morsel of information about what the fuck is going on, even the lawmakers rallying to the governor's defense were left fumbling for answers on what the fuck they were gonna do. Assembly Member David Weprin attempted to tell reporters how legislators would fill the capital $15 billion hole in the capital plan, and settled on "You'll find out in a week."

Payroll mobility whacked

Regular readers of Streetsblog are aware that powerful Democrats in the state Senate have no interest in raising the PMT just in New York City to replace revenue lost by ditching congestion pricing. Non-regular readers of Streetsblog: extremely powerful state Senate Democrats from New York City had no interest in saving the governor by taxing their constituents for the benefit of the suburbs. That opposition was key to killing the idea.

Deputy Senate Majority Leader Mike Gianaris (D-Queens) said there was heavy opposition to among his members. One senator, who shall remain anonymous, gave me a simple "fuck no" when I texted to ask if the Senate had any interest in reversing course.

And state Sen. Liz Krueger (D-Manhattan) — who admonished Hochul in a statement Wednesday night — kept up her assault on the governor's folly on Thursday.

A PMT hike would hit workers harder than a toll on some drivers, Krueger said.

"Payroll mobility taxes are actually taxes on workers," Krueger said at a rally of lawmakers and advocates in favor of congestion pricing. "It's not a corporate tax, it's a tax on the workers. And I do not think we have an appetite for that in the Senate."

Members of the Assembly have also said the PMT is dead.

Who's blackmailing who?

Congestion pricing opponents held a mid-morning rally to praise the governor's decision to pause congestion pricing.

Aware of the blatant hypocrisy of voting for the tolling legislation in 2019 only to oppose it in 2024, Assembly Member Stacey Pheffer Amato tried to head off any suggestion she was running from her past.

"I voted for congestion pricing as a policy within a budget that was shoved down our throat in the middle of the night," she said. "Do I want to say it's political blackmail? At times it is, and I'm going to say that. But we make decisions that we make because there are good things on our budget for people in our district."

But Pheffer Amatto's idea of thoughtfully considered governance that doesn't rely on blackmail is to whip together a $15 billion rescue package in two days behind closed doors.

And while it's true that congestion pricing was packaged in a budget that lawmakers voted for in order to claim credit for other popular things their constituents like, it's revisionist history to suggest congestion pricing itself was not debated extremely publicly.

Then-Governor Andrew Cuomo, himself no shrinking violet, announced his support for the idea in 2018. The plan didn't actually make it into the budget that year, and went through months and months of debate and analysis before yet another push for it in a closely-watched budgetary process. People understood what congestion pricing meant, what it was supposed to do and how much money it would raise.

As for the governor's mysterious PMT proposal, no one knows anything about it. And the session ends at some point on Friday, which gives very little time to have learned about this, analyze it or understand the alternatives.

Where's Kathy?

No one knows! The governor didn't make a single public appearance Thursday. Every piece of information on the alleged payroll tax had to be pulled out of lawmakers under penalty of having to talk to reporters for even a single second more than they wanted.

Stakes are high

The Second Avenue Subway is on the list of projects that the MTA has said must be funded with congestion pricing, and because the promised federal money requires a local match, this throws the federal matching funds into jeopardy, said Fauss.

"In general, the MTA's funding partners expect that they won't be the only ones picking up the tab, and in the case of federal matching grants, this is a legal requirement," she said.

A note about me wearing a blazer

The rumors are true:

Today, after I arrived in the Capitol building wearing jorts and a sleeveless t-shirt, I got enough strange stares from people here that I felt compelled to put on a pair of jeans and a blazer.

But don't worry: I changed clothes in a supply closet like a weird interloper.