Drivers May Pay $11.52 to Enter Manhattan's Congested Areas

(Bloomberg) -- Commuters driving into Manhattan’s most congested areas would have to pay an $11.52 daily fee under a proposal from a panel created by Governor Andrew Cuomo.

The plan defines a geographic "pricing zone" and recommends the installation of technology to monitor traffic and charge vehicles electronically. Revenue would go to transit improvement, including continued repairs of the decaying subway system.

“Our subway system is in a state of cardiac arrest,” said panel member Scott Rechler, chairman of RXR Realty LLC, a real estate developer and manager. “We have to do open heart surgery.”

Cuomo established the panel last year after a series of subway breakdowns, fires and derailments combined with frequent delays. The 100-year-old system’s problems result from decades of deferred maintenance and underfunding, and damage to its track and signaling equipment from salt corrosion after tunnels were flooded during Hurricane Sandy in 2012.

Meanwhile, traffic congestion in the central business area is costing the city economy about $20 billion a year, according to a report released this week by the Partnership for New York City, a civic group of corporate executives.

Standstill Traffic

The central business district for Manhattan is bounded by 60th Street on the north, Battery Park on the south, the Hudson River and the East River. Under the plan released Friday by Cuomo’s Fix NYC panel, automobiles entering between 6 a.m. and 8 p.m. on work days would pay $11.52. Trucks would pay $25.34, while taxis and for-hire vehicles would pay $2 to $5 per ride. 

East River bridges would remain free, and vehicles entering through the Holland and Lincoln Tunnels, which exit directly into the central business area, would pay only tolls, not a zone fee. Motorists crossing the Hudson on the George Washington Bridge would be charged a fee if they also entered the congestion zone.

The plan would raise revenue of $810 million, not including the surcharge applied to taxis and application-based for-hire vehicles such as Uber and Lyft. It would reduce traffic into the zone 13 percent, according to the panel. It also would help increase average vehicle speeds by 9 percent. Traffic moves at an average 4.7 miles per hour in those nine square miles now, said panel member Sam Schwartz during a telephone news conference.

Underground Hell

Schwartz said the plan would concurrently reduce traffic and raise revenue for mass transit. The state Metropolitan Transportation Authority, which operates city buses and subways, would have to make extensive service improvements before establishing the fee program, he said.

Fix NYC is proposing their recommendations be done in phases. The fee pricing phase, estimated to start in 2020, wouldn’t be instituted until hundreds of millions of dollars are invested to upgrade the city’s buses and subways to handle the larger demand caused by the increased costs of entering the city in vehicles.

“Before asking commuters to abandon their cars, we must first improve mass transit capacity and reliability,” the panel wrote.

The plan also calls for a “payroll mobility tax” that would raise about $1.6 billion dedicated to mass transit, and increased real estate taxes reflecting the improved value of property resulting from its access to mass transit, said panel member Rechler.

Mayor Cautious

Cuomo, a second-term Democrat, created the panel in October and asked it to devise congestion-reducing proposals for this year’s legislative session. Mayor Bill de Blasio, a Democrat who has long feuded with the governor, opposes congestion pricing and calls it a “regressive tax."

De Blasio said Friday that he hadn’t seen the panel’s report and recommendations and would keep an open mind about it. A fundamental issue “is how to create fairness,” he said during an interview on WNYC radio.

“There are some better elements in this plan than in the past,” he said. “We have to decide as a city whether we think it’s fair or not and whether adjustments are needed. This is going to be a long debate over the next several months.”

In April 2008, the state Assembly rejected then-Mayor Michael Bloomberg’s proposal to charge cars $8 and trucks $21 upon entering the most congested parts of Manhattan, which he said would reduce pollution and raise close to $500 million. Bloomberg is founder and majority owner of Bloomberg News parent Bloomberg LP.

New York would be the first city in the U.S., but not in the world, to have congestion-zone fees. Singapore, Stockholm and London have them, and have all seen increased average speeds, greater use of mass transit and improved air quality as a result, according to the Fix NYC report.

Cuomo, in a statement, said he will discuss the proposals with lawmakers over the next several months with the aim of presenting a “real, feasible plan that will pass the legislature to raise money for MTA improvements, without raising rider fares.”

"The objective is not to raise tolls entering the borough of Manhattan, but more specifically those trips adding to the congestion in a defined central business district,” he said. “Trips to and from New Jersey can be less expensive than trips from New York City’s outer boroughs. Tolls vary widely, and they must be rationalized so costs are fair to all.”

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