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Congestion Pricing

Two Huge Questions About ‘Gridlock Gov.’ Hochul’s Congestion Pricing Delay

Can she even do this? And does she have a revenue plan? Maybe and no seem to be the answers.

She’s just a cartoon character now.

Gov. Hochul blew up congestion pricing, and she blew up the MTA capital plan, too. But while the Gridlock Governor made waves by revoking her support for congestion pricing less than a month before it was supposed to start on June 30, the sudden decision left a pair of looming questions that could be answered if the cynical and cowardly retreat was not so sudden and, apparently, so un-thought-out.

So let the Explainer walk you through it:

Can she even do this?

Hochul announced in a videotaped speech that she "directed the MTA to indefinitely pause [congestion pricing]," but that doesn't mean the toll disappears from state law. Congestion pricing is still the law of the land, and it was also approved by the MTA Board in a vote at the end of March.

At this point, the MTA seems to be playing along, at least telling a judge overseeing some suits against congestion pricing that the June 30 implementation date is no longer on the table. But some MTA Board members are not ready to vote to punt the toll into purgatory.

"My understanding with congestion pricing is if the MTA Board voted to support it, and the MTA Board is the entity that sets toll rates, and the board is the entity that gave a go-ahead for congestion pricing, it's the MTA Board's purview to also vote on the future of it, whether it's a delay or a cancellation," said Midori Valdivia, who was appointed to the MTA Board by Mayor Adams.

"And I'm gonna vote the same way voted before, which is, I'm going to vote yes to congestion pricing, and that it should start as soon as possible."

Valdivia is not alone. On Wednesday night Deputy Mayor for Operations Meera Joshi, another Adams appointee to the MTA Board, told the crowd at the Transportation Alternatives Streets for People party that "[Congestion pricing] needs to happen now."

A crucial wrench in the plan is that any delay long enough to eat into the 2020-2024 capital plan would mean the Board needs to completely abandon $15 billion of it sooner rather than later.

"From a fiduciary standpoint, we can only vote on things that we have money for. And right now, what I'm hearing is that we're not going to have $15 billion. If we vote for an indefinite postponement, and no one has briefed us on any other revenue coming in, I don't know how any MTA Board member could vote to move forward with any capital project," said Valdivia.

About that money...

Does Hochul have a backup plan?

The New York Times reported that Hochul was floating a higher payroll mobility tax on businesses in New York City as a replacement for the $1 billion per year that congestion pricing could raise to support $15 billion in bond sales. The governor and legislators already hiked the PMT in 2023 to fill the MTA's operating budget gap, a tax tweak that exempted Long Island, Westchester and Hudson Valley businesses — even though the tax applies to every county in the MTA service area.

The governor herself didn't mention that in the hostage video announcement that she was walking away from congestion pricing. Instead, she said that she "set aside funding to backstop the MTA Capital Plan, and [is] currently exploring other funding sources" to fill the fifteen billion dollar hole she blew in the capital plan.

The assertion that the state had $1 billion lying around to back up the bond sales seemed like it was on shaky ground when Hochul said it, and state Sen. Liz Krueger drove home how little the promise meant when she flatly declared that "as the Chair of the Senate Finance Committee, I am not aware of what she is referring to or where she believes that money will come from."

If that plan really was the PMT, Hochul will need to work to convince people to go along with it. State Sen. Mike Gianris, the high-ranking deputy majority leader in the body, told Streetsblog that the governor "may want it, but there is heavy opposition to it in the senate, so it's not real."

Opposition is also brewing across the Capitol, where Assembly Member Robert Carroll blasted the governor's trial balloon at a rally on Wednesday afternoon.

"If the governor thinks New York City businesses are the only businesses that should pay for the the MTA, she is wrong," said Carroll. "It is a regional transportation network."

And while the city's business class accepted last year's PMT hike as the cost of doing business, those same leaders are not receptive to a slapdash hike so soon after the last one.

Kathy Wylde, the president and CEO of the Partnership for New York City, said the feedback she's getting from her members "is not supportive."

"If we're trying to help the economy, if we're trying to avoid hurting the economy, why would we raise tax on New York City business?" she asked.

The governor's press office did not respond to multiple questions on the topic of the plan to provide replacement funding for the MTA.

So what happens next? We overnighted Dave Colon to Albany, where he'll be banging on doors all day.

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