Trump Administration Tells NYC to Shut Down Congestion Pricing
New York City's groundbreaking central business district congestion pricing plan went into effect just over a month ago, but the revenue-building, congestion-alleviating scheme may not be long for this world. Department of Transportation Secretary Sean Duffy, under the guidance of President Trump, has directed the federal transportation agency to cancel the special waiver allotted to the Empire State that enabled the city to charge motorists for entry.
"New York State's congestion pricing plan is a slap in the face to working-class Americans and small business owners," said U.S. Transportation Secretary Sean P. Duffy on Wednesday. "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. But now the toll program leaves drivers without any free highway alternative, and instead, it takes more money from working people to pay for a transit system and not highways. It's backward and unfair."
New York's congestion pricing had been in the works since 2019 and had endured a number of setbacks in its development, including an official pause from Governor Kathy Hochul back in June 2024 over affordability. However, the plan was finalized and un-paused in November 2024 after debates with city and state officials, labor unions, neighboring states, and industry lobbyists garnered a 40% cost reduction, lowering the standard toll from $15 to $9. Congestion pricing was officially implemented on January 5, 2025,
As the first form of congestion pricing here in the U.S., it required special federal approval from the Department of Transportation under a program known as the Value Pricing Pilot Program (VPPP). This pilot program was meant to emulate the urbanism projects of European nations, specifically around alleviating snarled city traffic.
The program was implemented to encourage value pricing pilot projects that manage congestion on highways through tolls, whether by a mile or by zone, and had a maximum of 15 slots available. Federal approval was required for state, regional, and local government agencies who applied, with New York being granted one of the first slots and making national history as the first city to employ such a program.
However, the position of the current presidential administration is that New York's plan actually violates certain federal road rules, with a letter from Secretary Duffy calling it "cordon pricing."
"First, CBDTP uses a method of tolling known as 'cordon pricing,' under which drivers who enter Manhattan south of 60th Street are charged tolls no matter what roads they use...But no statute contemplates cordon 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," a letter from Secretary Duffy to Governor Hochul reads.
"Second, the imposition of tolls under the CBDTP pilot project appears to be driven primarily by the need to raise revenue to the Metropolitan Transit Authority system as opposed to the need to reduce congestion...Even if improving the transit system may eventually affect roadway congestion, there is no indication that the tolls were set in order to achieve these attenuated effects."
The letter from Secretary Duffy goes on to claim the program hurts small businesses in New York that rely on residents from out of state for sales. Additionally, the letter claims that congestion pricing impedes the flow of commerce into New York, potentially making goods more expensive for New Yorkers. Finally, Duffy asserted that New York "shouldn't be reserved for an elite few," a statement that both the MTA and Governor Hochul took problem with, given the revenue from the plan was allocated for mass transit.
"Public transit is the lifeblood of New York City and critical to our economic future — as a New Yorker, like President Trump, knows very well," a statement from Governor Hochul reads. "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."
"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," a statement from MTA Chair Janno Lieber reads.
"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."
The Federal Highway Administration says it will work with project sponsors, including the MTA and Port Authority of New York and New Jersey, to terminate the tolls in an orderly fashion. In the meantime, the lawsuit filed by the MTA will likely hold this action up in court for some time. New Yorker's reception to congestion pricing has been mixed so far, but preliminary figures indicate that both congestion and pedestrian injuries decreased in the short life of the program so far.
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