FHWA Terminates New York City’s Congestion Pricing Plan

What happened: The Federal Highway Administration (FHWA) Feb. 19 halted a state program to generate revenue through congestion pricing in New York City. The program went live Jan. 5 after New York Gov. Kathy Hochul (D) placed it on a temporary pause last summer, citing concerns over the city’s post-pandemic economic recovery.

Why it matters: New York City’s congestion pricing, approved as a pilot program by the Biden administration, tolls drivers entering specific areas of Manhattan with a $9 base fee during peak hours and the potential for future increases. Drivers without E-ZPass and commercial vehicles would pay higher amounts, while overnight travelers would pay 25 percent of the peak fee. Gov. Hochul wants to use the revenue for a $15 billion bond to support the Metropolitan Transit Authority’s (MTA) transit capital plan.

U.S. Transportation Secretary Sean Duffy noted that congestion pricing left visitors and workers no free path to access the city, and that revenue generated was designated entirely for transit and not the roads that were being taxed. The Secretary also cited concerns that the program would negatively impact New Jersey residents and increase traffic in those communities.

What happens next: The MTA is challenging the withdrawal of approval in court, arguing FHWA lacks authority to reverse an agreement made under a previous administration.