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New York’s Metropolitan Transportation Authority’s operating budget could take a hit of more than $800 million starting next year as a result of the indefinite shutdown of the state’s congestion pricing program by N.Y. Gov. York, the agency’s finance chiefs told a board meeting yesterday.
While congestion pricing was intended to generate revenue for the MTA’s capital investment program, the absence of that revenue creates a ripple effect, according to the agency’s deputy chief financial officer, Jai Patel.
Delays in purchasing new buses and commuter locomotives will increase maintenance costs to maintain existing equipment. In addition, about 7,300 employees who would be working and paid through the capital budget would be transferred to operating jobs and paid from that budget. Then there is the risk of a potential early debt issue to consider. “As part of the pause, if cash flow is required, the MTA would have to issue billions of dollars of debt earlier in the financial plan than planned,” Patel told the board.
“The impact of the congestion pricing pause has not yet been budgeted beyond 2024 under the assumption that the pause will be lifted or replacement revenue will be provided,” said Kevin Willens, CFO of MTA. “But as we said earlier, the financial plan will be adversely affected if this is not the case.”
MTA President and CEO Janno Lieber emphasized the importance of the capital investments the toll plan was supposed to help pay for. “Investment to protect and preserve the system for future generations comes at a cost,” he said. “As trustees of the MTA, I think we need to step up and tell the world that it needs to be paid for in the existing capital program from 2020 to 2024.”
The MTA’s only bright spot 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 stalled in June after the pause of the congestion pricing plan.
Lawyers are asking New York Gov
In other news, two lawsuits were filed against the governor last week seeking to overturn his decision to halt the congestion pricing program. An action was filed by the City Club of New York, an organization that promotes good government, and two Manhattan residents. The other suit comes from Riders Alliance, Sierra Club and the New York City Environmental Justice Alliance.
“Subway and bus riders organized, campaigned for years and finally won on congestion pricing,” Riders Alliance Executive Director Betsy Plum said in a July 25 email. “We are not giving up our victory just because Governor Hochul broke the law. After years of working closely with the governor to start the program, his betrayal of the public transportation network we depend on did not leave us better option than going to court.”
Until June 2024, New York’s governor stayed behind the state’s congestion pricing program for Manhattan. “Congestion pricing will reduce traffic in our busy downtown, improve air quality and provide critical resources to the MTA,” Hochul said in a statement dated June 27, 2023. “We look forward to moving with the implementation of this program”.
Lieber told the board yesterday, “We take the governor at her word that she is committed to funding the capital program through congestion pricing.”
