Is Hochul’s Plan to Stop Congestion Pricing Legal?

Lawsuits had threatened to kill congestion pricing. Now, it might take a lawsuit to save it.

Julia Rock   ·   June 6, 2024
Kathy Hochul in front of traffic
Kathy Hochul celebrating the congestion pricing program in June 2023. | Don Pollard/Office of Governor Kathy Hochul

Governor Hochul announced Wednesday that she would “indefinitely pause” the New York City congestion pricing plan, catching the state legislature and the Metropolitan Transportation Authority by surprise just weeks before the new Manhattan tolls were set to go into effect.

“A $15 charge may not seem like a lot to someone who has the means,” Hochul said in a pre-recorded video announcing that she was halting the program, which had gone through decades of deliberation and state and federal reviews. “But it can break the budget of a hardworking or middle-class household.”

But some legal experts say that Hochul may not have the unilateral authority to halt tolls that were passed by the legislature in 2019. That measure, passed in the state budget, said the Triborough Bridge and Tunnel Authority, which is part of the MTA, “shall establish the central business district tolling program,” referring to the congestion pricing program.

“The way the law is written is very important,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University. “Here, the word ‘shall’ looks mandatory.”

“It can be reasonable for an agency to say it will take them some time to implement a requirement. But if they’re obligated to implement it, saying it’s been delayed indefinitely looks like a flat-out refusal to implement.”

In New York, people can bring claims through an expedited process known as Article 78 to challenge agency actions – or inactions. Gerrard, who published a law review article on congestion pricing when it first passed, said that groups seeking to challenge Hochul’s decision might bring claims under Article 78.

The issue is likely to go to the MTA for a vote, which could pose a separate problem: Board members have a fiduciary duty to act in the authority’s best interest, and it’s hard to see how slashing its funding would do that.

Congestion pricing was supposed to raise about $1 billion in annual revenue for the MTA, which would then use the money to secure bond financing for $15 billion worth of improvements to the subway and rail systems. The MTA board approved the tolling program in March by an 11 to one vote.

Hochul has now asked the MTA board to vote to halt the program. The 23-member board is supposed to be an independent body, but its voting members are appointed by the governor.

Her announcement brought rebuke from some board members, who said they learned of the move along with everyone else.

“This is a shocker,” board member Andrew Albert told Bloomberg.

As stewards of the MTA’s finances, board members face a tough decision to vote for a measure to strip funding from the agency.

“Hochul is directing them to do something that is not in their financial interest,” said Rachael Fauss, a senior policy advisor and MTA expert with Reinvent Albany. “This is the exact opposite of sound financial management…. I don’t see how they can square that with their duties as fiduciaries of the MTA.”

“There is no plan B to fund the MTA.”

—Midori Valdivia, MTA board member

Board members “are in a very difficult position,” said Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA. In recent months, the MTA decided to proceed with accessibility projects and contracts that are part of its Capital Plan and supposed to be funded by congestion pricing.

All of those projects are now in flux. “Who is going to work for a promise?” wondered Daglian.

Hochul said her administration has “set aside funding to backstop the MTA Capital Plan.” Observers are skeptical.

“As Chair of the Senate Finance Committee, I am not aware of what she is referring to or where she believes that money will be coming from,” state Senator Liz Krueger said in a statement.

“There is no plan B to fund the MTA,” MTA board member Midori Valdivia wrote on LinkedIn. Valdivia predicted that Hochul’s announcement would prompt the cancellation of Capital Plan projects like new subway accessibility programs and a zero-emission bus fleet.

Those accessibility programs include ramp and elevator projects in New York City subway stations and Staten Island Railway stations, which the MTA is required to complete under a 2022 civil rights settlement.

“We need those elevators and other essential transit projects to move forward so that disabled New Yorkers can take full advantage of our city’s vital transit system,” disability rights groups wrote in a statement. “Governor Hochul’s last-minute move will delay them.”

On Wednesday, the governor proposed higher taxes on businesses as one way to make up the funding shortfall. But such a move would need to be approved by the state legislature before its session ends this week. The legislature had proposed corporate tax hikes in state budget negotiations earlier this year, but Hochul did not endorse their proposal and tax hikes were excluded from the final budget.

Hochul’s announcement also drew criticism from climate groups, transit advocates, New York City business groups, and some lawmakers.

Senate Deputy Majority Leader Michael Gianaris called congestion pricing a “hard-fought, deliberately-achieved policy” in a tweet, and warned that halting it was a “huge mistake.”

Other lawmakers, especially on Staten Island and Long Island, applauded the about-face.

“Governor Hochul is right to indefinitely halt congestion pricing,” said Democratic assemblymember Kenneth Zebrowski, who represents Rockland County, which has sued to block the program.

Concerns about affordability were raised during the years-long deliberations over the program, said Justin Balik, who worked on congestion pricing as director of state and federal affairs for the New York City Department of Transportation when the program was negotiated.

“If there was some kind of magical solution that everybody loved and had no political controversy attached to it and did the job of paying for what is the most important mass transit network in the United States,” Balik said, “that would’ve been implemented already.”

Julia Rock is a reporter for New York Focus. She was previously an investigative reporter at The Lever.
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