Governor Kathy Hochul
(CC BY-SA 4.0)
In June Gov. Kathy Hochul announced she was suspending congestion pricing “indefinitely” because of the adverse economic impact it would have on working-class folks and small businesses.
But political wags knew the real reason for the postponement: fear of the impact on Election Day. House Democratic leader Hakeem Jefferies leaned on Hochul because he did not want congestion pricing to be an issue in suburban congressional swing districts.
The gambit paid off—Democrats regained three tightly contested races.
With the election out of the way, Hochul quickly backtracked. She announced on Nov. 13 that she was lifting the ban. To lessen the blow, the tolls would be at a slightly lower price than originally planned. Passenger rates will be $9, down from $15. There is, however, a catch the tax will increase to $12 in 2028, after the next race for governor.
Hochul moved fast because she wanted to obtain the approval of the MTA Board and the Federal Department of Transportation to commence the program before Trump is sworn into office on Jan. 20, 2025.
Prominent left-wing Democrats are delighted with Hochul’s decision and claim that the $9 charge is not a tax but a user fee. What nonsense. As New York’s greatest governor, Alfred E. Smith once quipped, “Any way you slice it, it’s still baloney.” Yes, any fancy name government officials give to taking money from the public is a form of taxation.
Not everyone is thrilled with Hochul’s decision. Critics, including municipal unions leaders, New Jersey’s Gov. Murphy, and others are pressing forward with lawsuits to halt the traffic tax.
“The bait and switch, pretending to scrap this before the election only to relaunch it a week after the votes are counted, really underscores why people hate politicians and have no faith in elected leaders,” Republican City Council Minority Leader Joe Borelli told the New York Post. “People trust us less than a used car salesman in a polyester suit and Gov. Hochul proved them right,” he added.
What Hochul and her political confreres fail to grasp is that the congestion tax is a regressive one that will hit the pocketbooks of working-class folk.
Here’s why:
A trucking company will increase vendor delivery charges to cover the congestion tax. The vendors will then stick the business owner purchasing the product with the additional cost. And then the shopkeeper will increase the price the retail customer will pay. It’s a vicious cycle that harms everyone in the food chain.
There’s more: Right now, six of the 10 neighborhoods with the highest storefront vacancies are in the congestion pricing toll zone. I will not be surprised if more shopkeepers call it quits in 2025 and further depress the commercial real estate market.
Instead of imposing the congestion tax and increasing bus and subway fares by 4% in 2025, maybe, just maybe, the MTA will focus on fare and toll evaders.
A new report revealed that every month over 150,000 drivers using an MTA bridge or tunnel evade tolls by altering their license plates. Another 130,000 per month are “unbillable transactions” caused by missing or fake license plates.
On an annual basis, that’s about $23 million of lost MTA income.
Then there’s the bus and subway fare evaders. Nearly 50% of bus passengers thumb their noses at the drivers and refuse to pony up $2.90. On an annual basis bus rider evaders cost the MTA about $300 million.
As for subway fare evaders, the lost revenue annually is an excess of $280 million.
If the MTA cracked down on cheaters, it could pick up over $600 million a year and Hochul could pause indefinitely the congestion pricing plan.
But don’t hold your breath waiting for the MTA’s incompetent leadership to improve management of day-to-day operations and its budget. It’s much easier to stick commuters with the cost of their financial follies.