Kathy Hochul and CNBC Anchor Agree: Who Needs Congestion Pricing When You Could Crack Down on Fare Evasion Instead?

On Friday, in her latest appearance since stopping America's most consequential initiative for mass transit and the environment, Governor Kathy Hochul told a CNBC anchor that instead of implementing congestion pricing to raise billions for the MTA, officials could crack down on fare evasion instead.

"By the way, if you're looking for alternative revenue sources, this was going to raise about $1 billion a year. $700 million is being lost right now every year from people who are jumping the fares at the subways and the buses—45 percent of bus riders aren't paying their way," Squawk Box anchor Rebecca Quick said. "There's $700 million you could go after."

"You're absolutely right," Hochul responded. "I've said that before. So, there's other funding sources. I want to do the Second Avenue subway. I want all the improvements that have been promised to New Yorkers based on the bonding off this $1 billion, but we are capable of doing this."

There are two obvious problems with this financial reasoning (which is odd since I'm told that CNBC is watched by financial experts???).

One is something the governor alluded to: Congestion pricing would have raised $1 billion in tolls, and $15 billion in government bonds, to pay for huge public transit projects—like the Second Avenue subway extension (now on ice), and making sure the subway signals are not held together with spit and old copies of Reader's Digest. But you can't issue state bonds on a pinky swear to stop fare evasion.

The second is that the MTA already spends a whole lot of time and energy on cracking down on fare evasion, and the results are less than remunerative. Current fare evasion enforcement, which relies on the NYPD and MTA police, is extremely expensive. In 2022, the NYPD spent $4,200 in overtime per arrest and summons in the subway system, totaling $151 million, all to target people whose unpaid fares totaled a measly $104,000. A note to CNBC hosts: That's not good ROI (financial lingo), especially when you consider that this fare evasion enforcement only affects certain segments of the population—specifically, and overwhelmingly, Black and Latine New Yorkers.

As for bus riders, they tend to be poorer than their peers on mass transit—the average New Yorker who takes the bus earns under $30,000/year, and more than half are immigrants. These are the people congestion pricing was going to help, with big transit investments and less gridlock to make their commute better. 

Other possible solutions to fare evasion are financial and logistical nightmares for an agency that is now scrambling to fund its current and next capital plans, thanks to the governor's decision. Last year, a blue-ribbon panel the MTA convened to study the problem said that newer subway gates might help deter fare evasion in the subway, but the costs of those gates are mind-boggling—the MTA just spent nearly a billion dollars on their tap-to-pay system, now they're going to rip all this infrastructure out of 472 subway stations and replace it with something else? The MTA piloted a new kind of subway gate earlier this year and guess what? New Yorkers found a way to evade the fare anyway.

But instead of transit riders, Hochul has cast her lot with drivers, who make more than double what bus riders earn—and New Jersey residents who drive into Midtown diners. A Siena College poll released this week found that wealthier New Yorkers who make more than $100,000/year approved of Hochul's decision to cancel congestion pricing, 55 percent to 23 percent; New Yorkers earning less than $30,000/year approved 32 percent to 23 percent, with 55 percent of those polled saying they were in the middle or they didn't know.

Quick, the CBNC anchor who interviewed the governor, has long been an opponent of congestion pricing.

"It will mean more people won't come back to work," Quick said in a clip from last year. "Why would you add this as another reason for people to not come back to work when you say you want them here to eat in the restaurants to shop downtown, to do these things?"

"We can help remove congestion," Quick quipped. "We can move the show back to Englewood Cliffs."

"Yeah, that'd be good for you," Quick's co-host replied. "Yeah," Quick said. (Quick apparently lives in New Jersey.)