New York State Budget Transit

Josh Shapiro Is Using Highway Money to Save Mass Transit. Could Hochul Follow?

New York has a little-noticed tool to shift billions of highway dollars to climate-friendly public transit projects. The governor doesn’t seem interested.

Sam Mellins · December 9, 2024

Governors Kathy Hochul and Josh Shapiro spliced together

Pennsylvania Governor Josh Shapiro diverted highway funding to public transit. Hochul has so far declined to take that move. | Images: Offices of Governors Kathy Hochul, Josh Shapiro | Illustration: New York Focus

Staying Focused

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Until last month, Philadelphia’s mass transit system was facing a “death spiral.” With fare revenue still below pre-pandemic levels and federal aid drying up, transit officials were warning of unprecedented fare hikes and service cuts — both things that discourage transit use and would have likely accelerated the decline.

Then Governor Josh Shapiro stepped in and single-handedly saved the system. He did it by using an easily available but little-used tool to boost transit funding at no cost to taxpayers or transit riders.

The federal government sends states billions of dollars each year to improve and maintain their transportation systems. By default, 80 percent of that money is allocated to highways and 20 percent to mass transit. But that’s not set in stone: Governors can choose to shift up to half of their state’s highway funding to transit instead, a move known as “flexing” the funds. Transit advocates and climate groups have urged governors to make wider use of this power to boost mass transit and reduce the environmentally harmful effects of highway expansion and car use.

A New York City subway on the left, and highway traffic on the right.

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Shapiro did just that. $153 million in funds that were allocated to highways will now go to the Southeastern Pennsylvania Transportation Authority instead, placing the agency on firm footing until state politicians can work out a permanent funding solution next year.

Meanwhile in New York, Governor Kathy Hochul’s decision to lower New York City’s maximum congestion pricing toll from $15 to $9 means that the state Metropolitan Transit Authority will likely slow down key upgrades and possibly pay more in interest on its loans, according to the state comptroller and independent experts.

Bolstering the congestion pricing revenue with highway funds could help keep the projects on track and prevent the growth of the MTA’s already heavy debt burden.

“It should absolutely be on the table,” said Alex Armlovich, who studies transit and housing at the politically moderate Niskanen Center and had called for Shapiro to shift highway funds to SEPTA. “Highway funding is a continuous fountain.”

New York Focus asked Governor Kathy Hochul, who calls herself a “champion” on climate issues, whether she will follow Shapiro’s example and use federal highway funds to close the gap left by lowering the congestion toll.

She said there’s no need.

“If you can do this in a purple state, then you can do it in a blue state.”

—Saul Levin, Green New Deal Network

“We’re not experiencing a gap. The same amount of money is going to be spent to make the major improvements,” she said. “I’m investing, like no other governor in history, in our mass transit systems.”

Even if the MTA eventually spends the same amount of money, some planned upgrades will likely take longer and cost more, according to Ana Champeny, vice president of the fiscally conservative think tank Citizens Budget Commission, since “the longer you wait to do a project, the more it costs.”

Hochul has said the lower $9 toll will still reduce traffic and air pollution, a key goal of the congestion pricing program, but the traffic relief her office anticipates is much smaller than what was predicted for the original plan.

Shifting highway funds to transit requires federal approval, and it’s not clear how the incoming Trump administration will respond to such requests.

Thanks to President Joe Biden’s Bipartisan Infrastructure Law, states have received a historic windfall of cash to spend on transportation. New York alone was allocated $36 billion, of which $15 billion can be spent on either roads or public transit.

So far, the overwhelming majority of that cash has gone to roads, New York Focus reported in February.

Kathy Hochul in front of a map of New York Route 17.

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The state’s official climate plan recommends using federal funds to expand mass transit infrastructure. But Hochul’s Department of Transportation is using big chunks of the infrastructure law money to support an aggressive program of highway expansions, such as an estimated $1.3 billion project in the Catskill region that the state’s own study projects will save drivers a maximum of six minutes.

Projects like that across the country might end up making Biden’s infrastructure law a cause of increased greenhouse emissions — the exact opposite of what it was intended to accomplish.

“Because Democratic leaders have not been doing more on transit, Biden’s legacy on climate is being cut into,” said Saul Levin, political director of the Green New Deal Network.

That could change if Hochul and other governors follow the example of Shapiro, who is considered a leading contender for the 2028 Democratic presidential nomination.

Shapiro’s action followed a campaign from Pennsylvania transit advocacy groups to inform the public about flexible funds and pressure decision-makers.

“We sent, like, 3,500 letters to the governor in three weeks,” said Laura Chu Weins, executive director of Pittsburghers for Public Transit. “We had phone banking days where people were calling riders across the state to educate them on this possibility and the situation that was happening in Philly.”

There hasn’t been any comparable effort in New York, where flexible funds have largely flown under the radar. But the state could still shift gears.

“If you can do this in a purple state, then you can do it in a blue state,” Levin said.

Colin Kinniburgh contributed reporting.