The City’s New Congestion Tax: Its Downsides and Upsides

Photo via NBC New York.

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New York City is in the midst of imposing a new congestion tax (a fine imposed for driving in busy areas) below 60th street, around Midtown and Lower Manhattan, perhaps as soon as April of 2024. This program would be the first of its kind in the United States, and has unsurprisingly brought its fair share of controversy.

During peak times (i.e. weekdays from 6 to 8 p.m.), drivers will be charged somewhere between $9 to $23 for driving in Midtown and Lower Manhattan. The price will lower to a range of $5 to $12 during overnight hours. The city will offer exemptions for commuter buses, school district vehicles, and government vehicles. A 25% discount will be given to drivers who make less than $50,000 per year for the first five years of the program after their eleventh trip in a calendar month. 

Drivers coming from Long Island, New Jersey, and Queens using certain tunnels (such as the Queens-Midtown Tunnel) may possibly get a break of $4 to $7. Although not solidified, full-size trucks may incur triple the fine. 

There is already a pre-existing tax imposed on Uber (at $2.50) and taxi riders (at $1.50) on trips that travel south of 96th Street. The new congestion tax will only charge cab drivers once per day at full price. But even with this mitigation in price, drivers will most likely struggle following the increase in fare prices and resulting lower demand. 

The plan faces strong opposition and has been delayed for years. New Jersey and Staten Island are even in the process of suing the Metropolitan Transit Authority (MTA), alleging that the congestion tax is just another cash grab.

The purpose of the implementation of this tax is multifold. NBC regards it as a plan that will “benefit everyone.” The plan aims to diminish the amount of traffic in the area, improve the air quality, lower carbon emissions, and use generated revenue to improve the abhorrently ill-maintained subway system. 

Revenue generation is estimated to total $1 billion each year and will be used to finance capital projects like expanding the Second Avenue Subway to Harlem, adding additional elevators and escalators for people with disabilities, and improving the subway signal system. The century-old subway system is currently in such a state of disrepair that it would require billions of dollars to rectify, a problem so severe that New York Governor Kathy Hochul has called a state of emergency

The tax is estimated to cut as much as one-fifth of cars from highly congested areas. Every weekday, 7.7 million people enter the central business district, with 1.85 million of them entering by motor vehicle. Traffic has resulted in astonishingly low travel speeds and has only gotten worse. In 2010, the average travel speed was 9.1 miles per hour (mph); in 2019, this was lowered to 7.1. However, the level of traffic would only be lessened because the poor and the middle class would be practically forced off the road, leaving the rich with more open streets. 

The congestion tax is not necessary to accomplish this. New York City and its three counties already generate $31.3 billion each year from state income tax alone, not to mention the revenue generated from sales and property taxes. Plenty of this could be redirected to other efforts, such as revitalizing the subway system.

As for the environment, this plan is projected to decrease GHG emissions by 15% in the region. The volume of particulates (i.e. particles found in soot, dust smoke), which are linked to decreases in public health and air quality, will drop significantly in Manhattan. The MTA plans on spending millions of dollars on investments such as installing air filtration units in neighborhoods that could end up with worse air quality due to diverted traffic from drivers who are attempting to bypass the toll.

Though the plan comes with its drawbacks, it could have the potential to revamp the subway system, lessen traffic, and moderately reduce carbon emissions. It is all up to the question of whether its benefits outweigh its negatives, which will almost certainly impact the poor and middle class disproportionately. The upper classes, on the other hand, will be left with faster, less-congested streets.

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This article was edited by Zachary Bader and Katherine Hohman.