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Hochul’s Congestion Pricing Pause Is Stuck in Traffic

"We’re debasing ourselves as a legislative body to provide cover to a clueless governor."

Gridlock in Manhattan

(Marc A. Hermann / MTA)

Will state lawmakers spend their last few hours in Albany saving Governor Kathy Hochul's plan to kill congestion pricing? Or will they refuse, potentially teeing up an epic MTA board meeting that would force the stewards of the transit agency to make an agonizing choice: side with the governor and nuke the MTA's finances, or defy her and press on with starting congestion pricing on June 30.

While Hochul herself has completely vanished from the public eye since she issued her shocking, pre-recorded video announcement—her office isn't even responding to questions from reporters—legislative leaders in the State Assembly and the State Senate began testing out potential replacements for the $1 billion that congestion pricing was supposed to bring into the MTA's coffers. [Update: At 7:15 p.m. on Friday, the governor gave a press conference, read our coverage here.]

First, they pitched an increase in the payroll mobility tax, but by Friday afternoon, that idea was dead, mainly because everybody—from state lawmakers to the bigwigs in the business community to the City's Independent Budget Office to the belt-tighteners at the Citizens Budget Commission—thought it was a stupid idea. Why would you cancel congestion pricing to help "working class New Yorkers," and replace it with a tax that would literally fall on working class New Yorkers? (Nevermind that people in the suburbs don't pay it!)

Then, lawmakers started talking about a literal "IOU" they could make out to the MTA in the form of $1 billion dollars, to be paid in 2025. What would this language look like on paper? Where would the money come from? No one could actually say for sure, but good government advocates and proponents of congestion pricing identified the biggest problem with the IOU plan—It doesn't give the MTA nearly enough of the money it needs and was supposed to get from tolling cars in Lower Manhattan.

This is because the $1 billion in annual, recurring congestion pricing tolls was being used to raise $15 billion in government bonds. That $15 billion was a huge chunk of the MTA's capital budget set aside for new electric buses, elevator repairs, new subway signals, the Second Avenue Subway extension, and just generally keeping the system alive. 

An IOU for $1 billion in one-time revenue is just that—an IOU—and the state can't issue bonds on it. No $15 billion.

On Friday afternoon, the State Senate saw the votes for an IOU weren't there and broke up their conference meeting. Carl Heastie, the Speaker of the Assembly, addressed reporters and said what other politicians haven't dared to say so bluntly: Governor Hochul did this for purely political reasons. 

"I'm one I've been one of the longest champions of congestion pricing even when this came up with Bloomberg," Heastie said. "But for the governor, she has her own sense of where she thinks our polling actually hasn't gone well on congestion pricing and she made a call."

Heastie added that he thought that the question of whether congestion pricing would begin on June 30 as scheduled was already settled. "I think what happens with congestion pricing, I think that's been decided already, I'd say at least the delay," Heastie said.

But…is that true? Can Governor Hochul just cancel or pause congestion pricing with a YouTube video? 

Not according to the government watchdog group Reinvent Albany, which has been a strong advocate for congestion pricing.

"Congestion pricing is required under a 2019 state law. Governors must follow the law," the group wrote in an FAQ about the current power struggle. "The Legislature would need to vote to change the law or the timelines established by it, otherwise the MTA is required to implement it." 

Reinvent Albany says that if anyone can cancel congestion pricing, it's the MTA board. Even then, they'd still need some sort of assurance that the MTA has its $15 billion, otherwise the board members would be violating their fiduciary duty to cancel the tolls. "We do not see how it is possible for the MTA board to fulfill its fiduciary duty by defunding the MTA," they conclude.

Oh yeah, and state legislators were supposed to leave Albany today, because it's the last day of the session (and Carl Heastie has a flight to catch tomorrow?) If you guessed whether Hochul's congestion pricing bombshell is fucking up the already fucked-up business of Albany at the end of the session, you'd be correct.

New Yorkers who support congestion pricing are burning up legislators' phones, while many powerful lawmakers and interest groups are urging the governor to change her mind again. We might be in for a long night.

"We’re debasing ourselves as a legislative body to provide cover to a clueless governor," one source in the Assembly told Hell Gate. "Congestion pricing is a law and you can’t just ignore it because a poll made you nervous. What are we even doing here?"

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