Why New York Governor Kathy Hochul abolished the city toll

Before she made a last-minute decision to change course and “indefinitely suspend” a landmark plan to impose higher fees on motorists for clogged Manhattan streets, Democratic New York Gov. Kathy Hochul received $36,000 from lobbyists for the state’s auto dealers. Half of that money came from a lobby group that opposed the congestion charge, citing “consequences for the dealers and the thousands of people they employ.”

Just two weeks ago, Hochul told heads of state and government at the World Economic Forum that investments in public transport, for example in the form of city tolls, were “the responsibility of the cities”.

But on Wednesday, Hochul said transportation reform was not in the best interests of New Yorkers.

“After careful consideration, I have come to the difficult decision that implementing the proposed congestion pricing system at this time creates too many unintended consequences for New Yorkers,” she said during a press conference on June 5. “For that reason, I have directed the (Metropolitan Transportation Authority) to suspend the program indefinitely.”

Hochul’s office did not respond to a request for comment on the donations from the automotive industry.

The tariff plan called for a $15 toll on passenger vehicles traveling in Midtown and Lower Manhattan – New York City’s notoriously congested central business district – between 5 a.m. and 9 p.m. on weekdays. This plan was to be the first of its kind in the United States, after transportation advocates had pushed for it for nearly sixty years.

Supporters of the plan hailed it as a significant step forward for transportation policy in the United States, saying it could usher in a “transportation revolution” and serve as a model for other cities seeking to fund public transit and improve air quality.

Many supporters also saw it as a way to raise money for the city’s ailing subway system. Last October, the head of the Metropolitan Transportation Authority (MTA), the nonprofit corporation responsible for public transit in New York City, described the 100-year-old system as “dilapidated and unable to cope with the explosive growth in ridership.” The new toll was expected to bring in $15 billion for the transit system.

However, car dealers expressed concerns about the impact on car sales, as the plan would reduce the number of cars entering the central business district by an estimated 17 percent, or 153,000 vehicles.

In February, the Greater New York Automobile Dealers Association, a lobbying group for new car dealers in the New York metropolitan area, wrote in an email to its subscribers that it had “concerns that the plan could harm businesses and workers in the proposed price zone, where nearly all of the Greater New York Automobile Dealers Association’s Manhattan dealers are located.” According to the email, the group filed a brief with the MTA last September opposing the congestion plan.

Two months before the lobbying group filed that comment, it donated $18,000 to Hochul’s campaign, according to disclosures from New York State election officials. The same month the group filed its public comment, the similarly named New York State Automobile Dealers Association, a statewide trade association for auto and truck dealers, donated $18,000 to the governor’s campaign. The two lobbying groups co-hosted an event promoting auto jobs in May 2021.

Hochul has long been a major beneficiary of auto dealerships. Since 2018, the Greater New York Automobile Dealers Association has donated a total of $92,700 to Hochul’s campaigns, including a $47,100 donation in October 2021, campaign finance records show. The Automobile Dealers of New York political action committee has contributed nearly $78,000 since 2018.

In an email to its members in May, the Greater New York Automobile Dealers Association called Hochul a “staunch supporter of our industry.” The lobbying group is hosting a reception for the governor in Queens on June 11. It is suggesting donations for the event range from $5,000 to $10,000.

Hochul also received $5,000 last July from the Trucking Association of New York, which represents the trucking industry and is fighting in court against the introduction of a city toll.

Companies that depend on car sales have been fighting tolls since the 1920s. One industry publication declared: “Roads: They will be free forever!”

The governor had touted the plan to introduce a congestion charge for months before reversing her position. In a statement last December, she claimed, “This initiative will make New York City a global leader in transportation policy.”

But on Wednesday, Hochul reversed her position, noting in her press conference that “hard-working New Yorkers are suffering greatly in terms of costs” and that the decision to block the pricing program was made to protect workers and the “economic vitality of our city.”

The plan was set to take effect on June 30, and the governor’s reversal came as a shock and disappointment to advocates who had fought for years for the congestion charge. “It is a betrayal of millions of transit riders and of the future of New York’s climate and economy,” said a transit activist at the New York Times On Wednesday.

The New York City Environmental Justice Alliance, an environmental law group that focuses on the needs of low-income neighborhoods and communities of color, said it was “deeply disappointed” by Hochul’s decision.

“One year after our skies turned orange and in the midst of a climate crisis, New York cannot abandon plans that will reduce traffic congestion, improve public transit and help us meet our climate goals,” the group said in a statement.

A city toll would have primarily affected delivery trucks into the city and car commuters to Lower Manhattan, who are mostly high earners, according to an analysis by the city’s Department of Transportation.

The MTA also signed a $507 million contract with a private company in 2019 to install tracking and toll enforcement devices in the Manhattan area for the toll program. Some say the agency can no longer legally stop the toll program.

In addition to opposition from the auto industry, New York’s plan to introduce a congestion charge also faced growing opposition from other groups, including lawsuits from New Jersey residents and a Staten Island teachers’ union. Politicians in New Jersey publicly celebrated Hochul’s last-minute turnaround.

In an MTA study of thousands of public comments it received on its proposed congestion charging plan, the agency found that many of the comments supported the plan and “its ability to have a positive impact on the region.”

“However, other public comments highlighted specific concerns about congestion charging, including the financial impact the new costs would have on certain individuals, businesses or industries,” the agency noted.

While no city in the United States has yet introduced such a congestion program, several cities around the world, including London and Milan, have been successfully using congestion pricing for years. According to a recent report, the pricing resulted in fewer traffic accidents in both cities and a 16 percent reduction in carbon dioxide emissions in London.

Hochul’s reversal comes at a time when New York State is struggling to sufficiently reduce its emissions. The state set “ambitious goals” in 2019 to cut greenhouse gas emissions by 40 percent from 1990 levels by 2030 and 85 percent from 1990 levels by 2050.

According to an analysis released by the New York City government, air pollutants in the city are currently responsible for 2,400 deaths per year and result in thousands of emergency room visits and hospitalizations for asthma and other heart and lung problems.

Hochul’s decision to halt the toll was also reportedly motivated by the upcoming election and fears that the measure could hurt Democrats in the polls as their presence on the national stage increases.