On the 46th day since the congestion toll for vehicles entering the portion of Manhattan south of 60th Street went into effect, U.S. Transportation Secretary Sean Duffy took the first step toward terminating it. Since he issued his order, New York officials say they’ll fight to keep collecting it.
A press release issued Wednesday by the U.S. Department of Transportation announced the news: “The Federal Highway Administration today terminated approval of the pilot for New York’s Central Business District Tolling Program (CBDTP). In a letter to New York Governor Kathy Hochul, the Department rescinded a Nov. 21, 2024 agreement signed under the Value Pricing Pilot Program (VPPP) that effectively ends tolling authority for New York City’s cordon (congestion) pricing plan, which imposes tolls on drivers entering Manhattan below 60th Street.”
Duffy Orders the Axe
Duffy’s letter constitutes a memorandum in letter form regarding the tolling program (download below). He started by referring to the Federal Highway Administration’s (FHWA) approval of the CBDTP, a pilot project under the Value Pricing Pilot Program (VPPP), under a Nov. 21, 2024 agreement between the FHWA and the New York State Department of Transportation (NYSDOT). He said: “The VPPP is an exception to the general rule prohibiting tolling on highways. Congress approved the VPPP exception in 1991 as a pilot to test congestion production techniques. New York State is one of the 15 states authorized to implement the program.”
Duffy also made it clear that he was acting at POTUS 47’s request: “[He] asked me to review FHWA’s approval of the CBDTP as a pilot project under VPPP. In particular, the President expressed his concerns about the extent of the tolling that was approved by the Department of Transportation on highways that have been constructed with funds under the Federal-Aid Highway Program and the significant burdens on the New York City residents, businesses and area commuters (including those from New Jersey and Connecticut) who regularly use the highway network in the CBD tolling area.” He went on to mention the concerns expressed by New Jersey Gov. Phil Murphy, under whose direction the State became the lead plaintiff in one of cases that challenged the toll in court, and New Jersey Transportation Commissioner Francis K. O’Connor: “Additionally, I have been made aware that legal challenges are pending regarding the project, which question whether the scope of the project exceeds the authority of VPPP.”
Duffy stated what appears to be his main objection to the toll: “Users of the highway network within the CBD tolling district have already financed the construction and improvement of these highways through the payment of gas taxes and other taxes. The recent imposition of this CBDTP pilot program upon residents and businesses left highway users without any free highway* alternative on which to travel within the relevant area. Moreover, the revenues generated under this pilot program are directed toward the transit system as opposed to the highways. I do not believe this is a fair deal.” He then concluded the preliminary portion of the document by saying: “I have reviewed the tolling authority granted VPPP to the CBDTP pilot project for compliance with federal law. I have concluded that the scope of this pilot project as approved exceeds the authority authorized by Congress under VPPP.”
Duffy added that, with limited exceptions, highways built in part with federal money are required to be toll-free, although §1012(b) of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) allowed for pilot programs to impose tolls. He said that §1216(a) of the Transportation Equity Act of the 21st Century (TEA-21), enacted in 1998, changed the name of the program, but did not define specifically what it meant. He then gave his reasons for opposing the toll.
First, Duffy said: “The CBDTP’s cordon pricing program provides no toll-free option for many drivers who want or need to travel by vehicle in the major urbanized area. Congress in a separate statutory provision has authorized cordon pricing on the Interstate System where drivers can choose a non-interstate route. But no statute contemplates congestion pricing in a situation where tolls are inescapable, and FHWA has never before approved a VPPP program that uses cordon pricing or that does not provide a toll-free option. I have concluded that Congress did not, in using the vague phrase ‘value pricing pilot program,’ authorize the unprecedented and consequential step of cordon pricing” (emphasis in original, citations omitted).
Highways vs. Transit
Second, Duffy said: “The imposition of tolls under the CBDTP pilot project appears to have been driven primarily by the need to raise revenue for the Metropolitan Transportation Authority (MTA) system, as opposed to the need to reduce congestion. I recognize that preliminary project data published by the MTA reports a congestion benefit, but the toll rate that is set under VPPP should not be driven primarily by revenue targets, particularly revenue targets that have nothing to do with the highway infrastructure …. The revenue target for MTA projects artificially drives the establishment of toll rates to the highway users rather than the price needed to reduce congestion. As a result, highway users of the Federal-aid highway network within the priced zone are burdened with a price that is set to raise certain amounts of revenue for MTA capital projects rather than a price that is necessary to have an impact on congestion.”
In his penultimate paragraph, Duffy gave the order: “Due to my conclusion that FHWA lacked statutory authority to approve the cordon pricing tolling under the CBDTP pilot project, I am rescinding the FHWA approval of the CBDTP pilot project under the Nov. 21 Agreement and terminating the Agreement … To be sure, the termination of the program may deprive the transit system of funding, but any reliance on that funding stream was not reasonable given that FHWA approved only a ‘pilot project.’ Finally, any reliance interest cannot overcome the conclusion that FHWA’s approval was not authorized by law … The FHWA will contact NYSDOT and its project sponsors to discuss the orderly cessation of toll operations under this terminated pilot project.”
The Empire State Strikes Back
As we reported extensively last year and at the beginning of January, there were multiple litigations on both sides of the Hudson over the congestion pricing project. That series of trials has not even concluded, as Judge Leo M. Gordon is still working on resolving some issues in the New Jersey case.
There will be more court cases coming, this time from New York State. Gov. Hochul blasted the Washington Administration and praised the city’s transit. Her press office released the following statement: “Public transit is the lifeblood of New York City and critical to our economic future—as a New Yorker, like [POTUS 47], knows very well. Since this first-in-the-nation program took effect last month, congestion has dropped dramatically, and commuters are getting to work faster than ever. Broadway shows are selling out and foot traffic to local businesses is spiking. School buses are getting kids to class on time, and yellow cab trips increased by 10%. Transit ridership is up, drivers are having a better experience, and support for this program is growing every day.”
Referencing POTUS 47’s tweet on his Truth Social platform in which he trumpeted “CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!” Hochul said, “We are a nation of laws, not ruled by a king. The MTA has initiated legal proceedings in the Southern District of New York to preserve this critical program. We’ll see you in court.”
The MTA confirmed that litigation is coming. A statement filed at by agency CEO Janno Lieber said: “Today, the MTA filed papers in federal court to ensure that the highly successful program—which has already dramatically reduced congestion, bringing reduced traffic and faster travel times, while increasing speeds for buses and emergency vehicles—will continue notwithstanding this baseless effort to snatch those benefits away from the millions of mass transit users, pedestrians and, especially, the drivers who come to the Manhattan Central Business District. It’s mystifying that after four years and 4,000 pages of federally-supervised environmental review—and barely three months after giving final approval to the Congestion Relief Program—USDOT would seek to totally reverse course.”
Andrew Albert, Chair of the NYC Transit Riders’ Council and a rider-representative at the MTA Board, also noted the benefits that the new toll have already brought to the city and its transit, and expressed concern about Duffy’s ruling. He told Railway Age: “People are already starting to see the benefits of congestion pricing. The air is cleaner. People are going through bridges and tunnels much more quickly. You can see that the streets are clearer. Pedestrians are safer now. The money has already allowed the MTA to purchase hundreds of electric buses. The Second Avenue Subway is continuing north to 125th Street.” Then he asked a rhetorical question about Duffy, or maybe his “king”: “Is he willing to give the money so the MTA can build the basic needs for the system, like making stations accessible, replacing old infrastructure, buying new subway cars, fixing old structures that must be repaired and kept modern so they won’t fall down? It’s an amazing system, but it requires a lot of upkeep. We can’t go backwards, and we’re doing things at a much more streamlined pace. We’re saving money and the jobs are getting done more quickly and efficiently. For those who worry that this is hurting business, trucks are making deliveries faster than they ever have, because there’s much less congestion on the roadways. They’re saving time and becoming more efficient, too.”
Looking Ahead
The Triborough Bridge and Tunnel Authority (TBTA) is still collecting the toll for its parent, the MTA, for the time being, anyway. As we have reported, Albert’s observations about the benefits within the city seem reasonable and, even though many motorists are still complaining about the toll, some have said that they can get into and around downtown and Midtown Manhattan faster, so they can live with it.
Duffy’s memo raised several issues concerning New York’s right to authorize the toll, Congress and provisions of federal transportation law, using money from motorists to help support transit, and other issues that could signify not only a political divide, but also one between motorists and transit riders. Some of those issues were raised in the cases that challenged the program in the first place, but at least some issues will probably get new hearings in court as the year, and this saga, continue.
We will examine some of these issues in our next report in this series.
*Editor’s Comment: There is no such thing as a “free” highway. – William C. Vantuono.
