Biden administration green lights nation’s first congestion pricing plan for New York

NEW YORK — The Biden administration on Friday cleared New York’s congestion pricing plan to move forward, approving an environmental review that suffered such significant delays many doubted the first-in-the-nation tolling system would ever happen.

The Federal Highway Administration issued a letter approving the New York Metropolitan Transportation’s Authority environmental assessment and issued a draft “Finding of No Significant Impact” that will now be up for public review for 30 days, according to a copy of the letter obtained by POLITICO.

The news means the agency has been given the green light to start charging drivers entering central Manhattan at peak times in an effort to cut down on gridlock.

MTA officials have said they would need almost a year to set up the new tolling infrastructure once it obtains federal approval, putting it on track to meet its current target of launching congestion pricing in the second quarter of 2024.

A spokesperson for Gov. Kathy Hochul said the finding “is a critical step that will allow our Environmental Assessment to be publicly available for anyone to read, and we will continue to work with our partners to move congestion pricing forward.”

“Governor Hochul is committed to implementing congestion pricing to reduce traffic, improve air quality, and support our public transit system,” John Lindsay, a spokesperson for Hochul, said in a statement. “We’ve worked closely with partners across government and with community members over the last four years to develop a plan that will achieve these goals.”

Democratic New Jersey Gov. Phil Murphy condemned the approval as "unfair and ill-advised," and said it undercuts the Biden administration's own environmental goals. He also said his office is "closely assessing all legal options" because the current plan burdens commuters, state agencies and the environment.

"Everyone in the region deserves access to more reliable mass transit, but placing an unjustified financial burden on the backs of hardworking New Jersey commuters is wrong," Murphy said in a statement. "Simply put, it is a money grab."

However, the Federal Highway Administration said it determined the environmental assessment addresses public input and considers the impacts in the 28-county area in New York, New Jersey and Connecticut.

"Congestion pricing is a generational opportunity to make it easier for people to get around in, and get to, the Central Business District, by reducing traffic and funding improvements to the public transit system,” said John McCarthy, a spokesperson for the MTA.

The public transit authority hasn’t determined how much to charge drivers, but has considered fares ranging from $9 to $23 for passenger vehicles and between $12 and $82 for trucks. The scenarios contemplate different combinations of potential discounts, credits and exemptions.

A six-member Traffic Mobility Review Board will recommend a final pricing structure for the MTA board to approve. Members include major real estate and business leaders such as Kathy Wylde, CEO of the Partnership for New York City that represents area corporations, and John Banks, the former president of the Real Estate Board of New York.

The state approved congestion pricing in 2019 to raise $1 billion annually for the MTA’s capital plan. But officials waited more than a year for the Trump administration to determine what kind of environmental review they had to conduct before launching the program. Federal approval is required because the plan involves placing tolls on highways that have received federal funding.

Transit officials said the Trump administration held up the process amid political infighting with New York, with former Gov. Andrew Cuomo once stating it was retribution for the state's refusal to hand over driver's license records to federal immigration authorities. In 2021, the Biden administration said New York could conduct an environmental assessment, instead of a more rigorous environmental impact study.

The new tolling system — which will come on top of existing charges for the George Washington Bridge and Lincoln and Holland tunnels — has also drawn opposition from a bipartisan coalition of suburban lawmakers in New York and New Jersey. It’s expected to face legal challenges, as Murphy suggested.