With federal approval of New York’s environmental assessment, most of the federal, state, and local obstacles to New York City’s cordon pricing plan — which almost everyone erroneously calls a congestion pricing plan — have been removed. But there is still one more: New Jersey is suing to stop the plan because New Jersey residents would pay a large share of the costs yet get few of the benefits. As several New Jersey legislators have accurately pointed out, the plan “is nothing more than a cash grab” aimed at helping to close the deficit of the New York Metropolitan Transportation Authority (MTA) and specifically the subway system, which New Jersey drivers would rarely use.
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The plan calls for charging anyone who drives into Manhattan south of 60th street between 6 am and 10 pm to pay $23. This is expected to earn $1 billion a year, all of which would go to the MTA to help cover its $2.5 billion annual deficit. Low-income people would be able to use the amount they pay as a tax credit, but if they are low income they probably aren’t paying much in taxes. New Jersey residents would pay the $23 instead of, not on top of, existing tolls, which effectively increases their cost of entry into Manhattan by 56 percent. Taxi and other for-hire drivers would pay the fee just once a day even if they recross the cordon several times. Continue reading
