A Backup Plan If Trump Ends Congestion Pricing? Um…

The Metropolitan Transportation Authority doesn’t have a whole lot of alternatives to make up the revenue from congestion pricing if President Donald Trump wins his battle against the Manhattan tolling program.

The state agency has its largest capital plan in history still lacking about $33 billion, even with the expected $15 billion the tolling program was expected to rake in over five years. So, with that program already accomplishing nearly all of the goals set out for it, there’s no backup plan if Trump turns off the toll cameras — as he’s promised to do this month.

“There is no Plan B,” MTA Chairman Janno Lieber said in a Feb. 18 TV interview.

So Lieber and New York Gov. Kathy Hochul have vowed to fight to the bitter end (in court, at least) with the governor countering U.S. Transportation Secretary Sean Duffy’s quest for an “orderly cessation” of congestion pricing with her call for “orderly resistance.”

Hochul was in the Oval Office during the last weekend in February, attempting to win over Trump with a presentation on all the benefits the program has already generated since it started in early January. Those benefits have included increased foot traffic and rising retail spending, as well as $49 million in revenue from toll collection. The governor’s team attempted to appeal to Trump personally in the presentation by using images of Trump’s real estate assets in Midtown.

Hochul discussed the meeting with Trump at the MTA’s monthly board meeting on Feb. 26, stating that it is still unclear whether the president will back down from his determination that the program is unfair to motorists.

“Public transit is facing an existential threat from Washington right now — whether it’s the overall funding or whether it is the attack on congestion pricing — one thing we’ve established is that New Yorkers don’t back down,” Hochul said in her remarks. “I had an interesting trip to the White House. I did my very best, and the fight’s not over.” 

Lieber supported Hochul’s somewhat aggressive approach to defending the program, which has fallen under criticism for being antagonistic or reactionary. 

“She is doing it both with a fact-based approach, and you saw that in the presentation she shared,”  Lieber said in a press conference. “She’s also doing it by emphasizing the way that congestion relief actually aligns with the principles that [Trump] has enunciated: local control, innovation in government, in some cases user-fee-funded infrastructure, which has been a priority in the Republican Party for many years.”

On the business end of the tolls, which charge $9 for most drivers who enter Manhattan below 60th street, commerce is “humming,” according to Lieber.

Foot traffic has increased 4 percent, Broadway theater attendance is up 21 percent, restaurant reservations are up 7 percent, and retail sales are up $900 million, according to the MTA. There was also a 61 percent year-over-year jump in “commercial leasing” inside the congestion pricing zone in January.

Over the last week since the White House’s social media proclaimed Trump “king” for ordering the end to congestion pricing, Hochul and Lieber have assured members of the media that there is no revenue-raising contingency for the $9 toll because state officials are certain the DOT’s orders will not last long before a judge.

The lawsuit in the Southern District of New York argues that the federal government cannot reverse a prior approval — which in this case was made by the Biden administration — of a project without a process that explains why the original approval was made in error. The federal program that congestion pricing was approved under, the Value Pricing Pilot Program, also has a specific termination process, with the State of New York being the only party given a unilateral right to end the program.

“I think the case is so airtight. … The Trump administration and the leaders of the U.S. DOT have to consider what it means to all these bond deals nationally, which are based on tolling revenues,” Lieber said during that Feb. 19 interview. “If the federal government says we can pull back that approval at any moment, there are toll roads in Texas and Florida that depend on approvals from this same program. That would really make bondholders nervous, and it would mean that future toll-backed revenue bonds would be a lot more expensive to issue. That’s something they have to consider.”

And it makes sense the MTA has no contingency plan for its funding because surely one would have surfaced in the decades that lawmakers have weighed whether to toll drivers in Manhattan.

“Of course there’s no Plan B,” said Danny Pearlstein, policy director for advocacy group the Riders Alliance. “Congestion relief was a last-resort revenue source. Any additional funding to be found must pay for other crucial upgrades after generations of disinvestment. No matter what, there are going to be difficult tradeoffs in the years to come.”

Federal approval of the tolling program took four years and included 4,000 pages of federally supervised environmental review paperwork before the Biden administration determined that it could move forward in late 2024. Congestion pricing’s latest journey started in 2017, when then-Gov. Andrew Cuomo set the wheels in motion, and it was adopted by the state legislature in 2019.

Trump publicly flouted his intention to kill the program in early February, and then made good on his promise on Feb. 19 when the U.S. DOT announced it would revoke federal approval. Justification for attempting to end the program was based on a desire to reduce costs for motorists who may not benefit from improvements to the public transit system if they continue driving into Manhattan, and that tolls could be an undue burden on drivers already under financial strain.

“Commuters using the highway system to enter New York City have already financed the construction and improvement of these highways through the payment of gas taxes and other taxes,” Duffy wrote in a Feb. 19 letter. “But now the toll program leaves drivers without any free highway alternative, and instead takes more money from working people to pay for a transit system and not highways. It’s backwards and unfair.”

Hochul took some time responding to the letter that day. But then she channeled her inner John Rambo, accusing the Trump administration of drawing “first blood” and dissing Trump’s supposed monarchist pretensions. 

She vowed to keep the toll cameras on until a judge ordered them turned off, but on Feb. 20 U.S. DOT officials wrote in a letter to state officials saying the program must end by March 21, the New York Post reported.

Meanwhile, the MTA desperately needs the toll revenue as the agency finds itself clinging to funds as its capital plans continuously increase in size. The MTA’s $55 billion 2020-2024 capital plan, viewed as colossal when it was approved in late 2019, has already been outdone by the $68.4 billion 2025-2029 capital plan. Even with congestion pricing, the agency is short about $33 billion to fund the 2025-2029 plan.

The MTA has been asking the state to fill the gap, but the agency has found that lawmakers — particularly Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins — were less than forthcoming in working the funding into the latest state budget proposals, which are still being negotiated in Albany.

Some of the costliest items addressed in the new capital plan include power upgrades at 47 substations and 16 circuit breaker houses, as well as structural repairs on more than 10 subway lines, painting and repair work for 20 miles of elevated structures, signal modernizations on the A line and three station renovations. It also includes ADA improvements at 17 stations and elevator or escalator replacements at 13 stations.

The cost of renovations to infrastructure and real estate also increases exponentially the longer they are deferred, Jamie Torres-Springer, president of MTA Construction and Development, told Commercial Observer in January. About 90 percent of the capital plan is focused on keeping the system in a state of good repair, he said. The MTA also plans to replace its 1980s-era cars and their orange and yellow seats with 435 new cars that will have surveillance cameras and cost about $1.27 billion by about 2027, the MTA has said.

Lieber updated the public on talks to fully fund the five-year capital plan, saying that Heastie, Stewart-Cousins and Hochul were negotiating behind closed doors to provide the agency with funding.

“We’ve crafted a local solution that works well for New York. … Why would the federal government take away that power?” Lieber said.

Mark Hallum can be reached at mhallum@commercialobserver.com.