NJ Tax Credit, Defunding MTA Proposed To Combat NY's Congestion Fees

NEW JERSEY — Two members of Congress representing New Jersey revived efforts to strip New York City's public transit of key federal funding if the Empire State's congestion-pricing plan moves forward.

Under the pricing model, drivers could get charged up to $23 to drive into or within Manhattan's Central Business District. New Jersey leaders in both major political parties have decried the plan, which could leave state residents with a greater financial burden, declines in air quality and even more auto traffic in certain areas, according to state officials.

The congestion tax could go into effect before the end of the year, pending federal approval.

Rep. Josh Gottheimer (NJ-5) announced legislation Thursday that targets New York's congestion toll:

• prohibiting the Metropolitan Transportation Authority (MTA), New York City's main public-transit agency, from receiving federal capital grants.
• offering commuters a federal tax credit at the end of the year that's equal to what they paid in the congestion tax.

If passed, the bill would take $2 billion in federal funding from the MTA, Gottheimer estimates. The MTA has a $19.2 billion budget this year.

Gottheimer, a Democrat, announced two cosponsors for the bill: Reps. Jeff Van Drew (NJ-2) and Mike Lawler (NY-17) — both Republicans. Lawler's district includes Rockland County, a suburb outside of New York City where leaders have spoken against the congestion-pricing plan.

"New York City and the MTA are playing Russian roulette with their economy," Gottheimer said, "and are willing to stick it to all of those hard-working commuters from Jersey, the outer boroughs and the New York City suburbs, like my friend Congressman Lawler represents, with their absurd $23 a day congestion tax plan."

Van Drew and Gottheimer introduced a similar bill in August 2021, but the legislation never advanced to a full House vote.

The congestion tax is designed to reduce traffic in New York City. Under the plan, motorists must pay a disincentivizing fee for driving in Manhattan's Central Business District — the area south of 60th Street.

New York State lawmakers approved the program, which was included in the 2019 state budget. If implemented, New York would create the nation's first congestion-pricing plan, following in the footsteps of European cities such as London and Stockholm.

The MTA hasn't made announced an official fee scale, as the congestion plan awaits final federal approval. But the agency published an environmental assessment for the program last August, showing prices ranging from $9 to $23.

"Anyone serious about the environment and reducing gridlock understands that congestion pricing is good for the environment, good for getting fire trucks, buses and delivery vehicles through the city, and good for the 90% of people who depend on mass transit," MTA spokesperson John McCarthy told Gothamist.

But critics have noted that congestion fees would only support the MTA, excluding any New Jersey-based public transit that travels to and from the city, such as NJ Transit and the Port Authority Train-Hudson (PATH). While the program seeks to incentivize alternative commuting methods, such as public transit, Gov. Phil Murphy's administration warned that the current plan may require the state to raise NJ Transit fares. Read more: NJ Transit May Need Fare Hikes Under NY Congestion Plan, State Warns

A federal environmental assessment notes the potential for a 2.3 percent increase in NJ Transit rail use. One estimate states that NJ Transit would need to add more than 100,000 bus trips and 4,700 train trips per year. While state officials say they haven't been given enough time to adequately review the projections, Murphy said that even modest increases in use would result in millions of dollars in new expenditures per year.

The MTA, meanwhile, hopes to heavily rely on congestion fees to recover from its financial woes. Although the MTA received $15 billion in federal COVID-19 funding, ridership remains significantly below pre-pandemic levels. The agency finds itself nearing a "fiscal cliff," raising the possibility of increased fares and tolls along with service and job cuts, The City reports.

"When you have bigger deficits, you spend the federal aid quicker, which means you run out quicker," Kevin Willens, the MTA’s chief financial officer, said last July. "So we’re basically out of federal aid by 2024, which is a year earlier."