How Does Congestion Pricing Work? What to Know About the Toll System Taking Manhattan
The idea’s been kicked around by politicians and transit advocates for years but never tried in the U.S. Here’s a guide on what it all means, whom it will affect — and when we may actually see it in New York.
For decades, New York leaders have played with the idea of tolling car traffic in the city’s central core.
Now, as people and traffic slowly return to Manhattan’s center and climate change keeps punching the city in the gut, the push for so-called congestion pricing — to help reduce traffic-related emissions and raise money for mass transit — is gathering steam in earnest.
The idea was born in New York, then adopted in several overseas cities, but has never been tried anywhere in the United States. A bill from Albany gave New York’s plan the green light in 2019, but a lack of action by the Federal Highway Administration under then-President Donald Trump delayed the program.
As traffic surges again, a critical player for the concept, Gov. Kathy Hochul, has signaled her full support for the idea — despite waffling on the idea earlier on the campaign trail — and so has Mayor Eric Adams. The Biden administration is behind the plan, too.
In August 2022, the MTA completed a long-awaited environmental review of the idea, and laid out seven hypothetical tolling schemes and how they would affect traffic and revenue for the beleaguered transit agency.
But the idea has a ways to go before it hits the streets. The transit agency now awaits approval from the Federal Highway Administration before it can move forward.
If you need to get up to speed on what this all means, whom it will affect and when we may actually see congestion pricing in New York, here’s a guide.
What is congestion pricing?
Think of it like any bridge or tunnel toll — without the river.
The idea: You charge people money to drive in certain places. That fee, in theory, discourages some drivers from getting on the road, potentially reducing overall traffic.
A primer from the U.S. Department of Transportation calls the pricing scheme “a way of harnessing the power of the market to reduce the waste associated with traffic congestion.”
What might congestion pricing look like for Manhattan?
The city’s congestion pricing system — dubbed the “Central Business District Tolling Program,” or CBDTP, by the MTA — would affect all streets and roadways south of 60th Street, with three exceptions:
- The FDR Drive
- The West Side Highway
- The sections of the Battery Park Underpass and Hugh Carey (Brooklyn-Battery) Tunnel that connect the FDR Drive to the West Side Highway
Here is a map of what that looks like, via the MTA.
How much would it cost drivers?
The exact price of the toll has not been set. But we have some preliminary numbers, thanks to the MTA’s latest environmental assessment, released on Aug. 10.
In seven different scenarios, the MTA laid out tolls that could range from $9 to $23 per trip into the Central Business District during peak times, $7 to $17 for off-peak and $5 to $12 for overnight, depending on your type of vehicle. (By comparison, London’s congestion pricing fee is £15 or just over $18.)
There will also be additional tolls on “Gridlock Alert” days, which are pre-determined every calendar year by the city, when traffic is particularly heavy. It’s unclear what exactly those days will be, or the price of the tolls.
The 2019 law passed in Albany giving the green light for the program says that passenger vehicles should only be charged only once per day. It also allows for “variable tolling,” or toll rates that change at certain times of the day or on different days of the week, depending on traffic.
What counts as peak, off-peak and overnight times are not yet determined. Neither is whether there will be a cap on the number of trips a vehicle can take through the tolling area, for example a maximum of two crossings per day for trucks, as one scenario outlines.
The toll would be paid via E-ZPass or by mail for people without it, the MTA has said.
How will the system keep track of all of this? We don’t yet know, exactly.
But we have a glimpse of what officials are looking for from TransCore — the Tennessee-based company contracted by the MTA to build out the congestion pricing system in New York — according to the “request for proposal” the agency created in July of 2019.
THE CITY obtained that 3,022-page document (which you can read in full here, if you dare) through a source’s Freedom of Information Law request. Here are some highlights:
- The system must be able to “detect and identify vehicles entering the CBD,” or Central Business District below 60th Street, by their class and size.
- It must incorporate “optical character recognition” technology to be able to read license plates and identify vehicles.
- TransCore must make sure that all the physical parts of the tolling system — like poles and signage — have minimal interference with “the public’s sightlines, view corridors and open spaces.” The firm should use existing infrastructure where possible and avoid installing equipment in front of landmarks.
- The contractor is charged with minimizing horizontal surfaces in new tolling structures “that might be susceptible to pigeons.”
Why do this? What will New Yorkers get out of it?
Fifteen billion dollars.
That’s how much money the state legislature mandated the MTA must raise through congestion pricing — by leveraging annual revenue to borrow $15 billion for the transit agency’s current five-year capital program.
That cash goal is laid out in the 2019 MTA Reform and Traffic Mobility Act, which allowed the program to proceed.
“They have to, by law, set tolls that are going to raise $15 billion for the capital program,” said Rachael Fauss, senior research analyst at the advocacy group Reinvent Albany. That money would in turn fund big-ticket items and infrastructure projects needed by the transit system.
But money isn’t the only reason to do congestion pricing, advocates say.
The greener goal is to cut down traffic, which will make faster rides for those still on the road while reducing some vehicle, air and noise pollution. In pushing for congestion pricing, the MTA cites a federal study of traffic tolling elsewhere in the world that found carbon dioxide emissions dropped by double digits in both London and Stockholm after those cities adopted the policy.
“We have to really challenge ourselves to make big changes because what we are facing is an existential crisis,” said Renae Reynolds, executive director at the Tri-State Transportation Campaign, noting recent extreme weather. “It is not conducive to any of us to squabble over a congestion pricing toll when we are facing rising tides.”
Who will actually have to pay in the congestion zone?
The 2019 congestion pricing law passed in Albany made tolling applicable to all cars, trucks and vehicles in the zone except three categories:
- Emergency vehicles
- Vehicles transporting people with disabilities
- Any vehicle belonging to families living inside the Manhattan congestion pricing zone in which the household earns $60,000 or less per year. (The cost of the tolls will be returned to them as a tax credit.)
According to Danny Pearlstein, policy and communications director for the Riders Alliance, other exemptions could be added to the mix by the Traffic Mobility Review Board (more on that later) and, finally, MTA’s board before congestion pricing hits the road.
The TMRB may also decide on whether to create special rules for for-hire vehicles, which — reminder — are already charged to drive south of 96th Street in Manhattan, including yellow cabs ($2.50 per ride) and app-based cabs like from Uber or Lyft ($2.75 per ride).
The MTA’s environmental assessment outlined some other scenarios that include additional exemptions. One exempts taxis, but not for-hire vehicles like an Uber car, and three of seven scenarios it studied exempt city buses from tolls.
Leaders from around the tri-state area have pushed for toll loopholes.
Queens State Sen. David Weprin, a longtime opponent of congestion pricing, has pushed for zero tolling for New York residents, and police union leader Pat Lynch has called for no tolling for law enforcement employees who drive to work. A New Jersey Congress member introduced legislation in 2021 that would block federal funding to New York if Garden State drivers are subject to congestion pricing tolls.
Too many exemptions could undermine the purpose of the system, Pearlstein said.
“The legislation requires the MTA to raise a certain amount of money, which means that if you’re not raising it for one group, you have to raise it more heavily from another group,” he said. “The fairest thing to do is to have a robust program that treats as many people as possible the same, recognizing that no one has — except for these tiny categories — more of a claim to drive into the Central Business District than anybody else.”
Skeptics of congestion pricing — including de Blasio, before the former mayor came around on the idea — have knocked the tolling as a “regressive tax,” i.e. a fee that hits poor people harder because it’s a bigger chunk of their earnings. But it’s a bit more complicated, as this report from City Limits explains.
Where did congestion pricing come from?
Congestion pricing has been implemented in several major cities, including London, Stockholm and Singapore. But the idea was born in New York.
The father of congestion pricing was William Vickrey, a Nobel Prize winner and Columbia University economist who proposed the concept of charging drivers to reduce traffic back in 1959, according to The New York Times.
It’s been talked about in the city, off and on, for decades. Responding to federal pressure over air quality standards in the 1970s, mayors John Lindsay and Ed Koch tried various traffic bans and tolls during their administrations.
Former Mayor Mike Bloomberg proposed his own congestion pricing scheme for the city in 2007, but lawmakers in Albany quashed it a year later.
The current system, as outlined in the 2019 Act, is the result of pressure from then-Gov. Andrew Cuomo who called for a congestion pricing scheme after years of inaction on the idea. His change of heart came in the aftermath of the transit system’s “Summer of Hell” in 2017 and ongoing budget woes.
What needs to happen before we’ll see this on the streets? When will it take effect?
The next big steps for congestion pricing are: getting federal approval of the environmental assessment, and hashing out the details — who gets tolled, how much it will cost drivers and how it will all function.
In the MTA’s review, the agency found there are some “potential adverse impacts” from the congestion system, but concluded there are more benefits than harms.
In August, the transit agency will hold a series of six public hearings to take public comment on the assessment. They will be held on the following dates. THE CITY will update this piece when more information is made available on how and where to submit testimony:
- Thursday, Aug. 25, 5 p.m. to 8 p.m.
- Saturday, Aug. 27, 10 a.m. to 1 p.m.
- Sunday, Aug. 28, 1 p.m. to 4 p.m.
- Monday, Aug. 29, 1 p.m. to 4 p.m.
- Tuesday, Aug. 30, 5 p.m. to 8 p.m.
- Wednesday, Aug. 31, 10 a.m. to 1 p.m.
The work of making the final determinations about toll amounts and system functionality will be done by the Traffic Mobility Review Board, or TMRB, made up of six people — five appointees from the MTA and one from the mayor. The transit agency and Mayor Eric Adams appointed all TMRB members this summer. They are:
- Carl Weisbrod, former chair of the City Planning Commission and former director of the Department of City Planning.
- John Banks, president emeritus of the Real Estate Board of New York.
- Scott Rechler, chair of the Regional Plan Association and former CEO of the real estate group RXR.
- Elizabeth Velez, president of the construction management firm the Velez Organization.
- Kathryn Wylde, president and CEO of the Partnership for New York City.
- John Samuelsen, president of the Transport Workers Union (TWU) and former president of TWU Local 100 in New York.
Adams appointed Samuelsen, and the rest were appointed by the MTA. Weisbrod will serve as chair of the review board.
The traffic board’s recommendations will go to the MTA’s board for final approval — and since the MTA board is typically controlled by the governor, a lot of the power over the final implementation of the congestion pricing rests with whoever is top dog in Albany.
The current timeframe pushes possible implementation of congestion pricing until after the 2022 gubernatorial election.
But Reynolds said she’s “got hope in Hochul.”
“Although things are moving slowly, the ball is rolling,” she said.
Still, it may easily be another couple of years before New Yorkers see street tolls go into effect in Manhattan’s core, at the earliest. Once the FHA gives its approvals, TransCore has up to 310 days to complete the system and begin tolling operations. The MTA’s estimate for its implementation is late 2023 or early 2024.
And that’s barring some kind of lawsuit, said Pearlstein.
“Someone will sue,” he said. “If they sue when the system is about to be turned on, that could add months. It could add years.”