The New York Metropolitan Transportation Authority’s operating budget could take more than an $800 million hit beginning next year as a result of the indefinite halt placed on the state’s congestion pricing program by New York’s governor, the agency’s finance chiefs said at a board meeting yesterday.
While congestion pricing was aimed at generating revenue for the MTA’s capital investment program, the absence of these revenues creates a ripple effect, according to the agency’s deputy CFO, Jai Patel.
Delays in buying new buses and commuter rail locomotives will increase maintenance costs to keep the existing equipment going. In addition, about 7,300 employees who were going to be working on and paid through the capital budget would be transferred to operating jobs and paid from that budget. Then there’s the risk of potential earlier debt issuance to account for. “As part of the pause, if cash flow is required, the MTA would need to issue billion dollars of debt earlier in the financial plan than previously planned,” Patel told the board.
“The impact of the congestion pricing pause has not yet been incorporated into the budget beyond 2024 under the assumption either that the pause will be lifted or the replacement revenue will be provided,” said Kevin Willens, MTA chief financial officer. “But as we previously stated, the financial plan will be negatively impacted if that’s not the case.”
MTA Chair and CEO Janno Lieber underscored the importance of the capital investments the tolling plan was to help pay for. “Investment protecting and preserving the system for future generations comes at a cost,” he said. “As fiduciaries of the MTA, I think we must step up and tell the world that it has to be paid for in the existing 2020 to 2024 capital program.”
The one bright spot for the MTA came Tuesday when Gov. Kathy Hochul found $54 million in state funds to restart preliminary work on the Second Avenue subway extension project, which had been stopped in June following the pause to the congestion pricing plan.
Advocates sue New York governor
In other developments, two lawsuits were filed last week against the governor seeking to overturn her decision to pause the congestion pricing program. One action was filed by the City Club of New York, an organization promoting good governance, and two Manhattan residents. The other suit came from Riders Alliance, Sierra Club and the New York City Environmental Justice Alliance.
“Subway and bus riders organized, campaigned for years and finally won congestion pricing,” said Riders Alliance Executive Director Betsy Plum in a July 25 email. “We’re not giving up our victory just because Governor Hochul broke the law. After years of working closely with the governor to start the program, her betrayal of the public transit network we depend on left us no choice but to go to court.”
Until June of 2024, the New York governor stood behind the state’s congestion pricing program for Manhattan. “Congestion pricing will reduce traffic in our crowded downtown, improve air quality and provide critical resources to the MTA,” Hochul said in a June 27, 2023 statement. “We look forward to moving ahead with the implementation of this program.”
Lieber told the board yesterday, “We do take the governor at her word that she is committed to funding the capital program through congestion pricing.”
