17 Years, $700 Million Wasted: The Stunning Collapse of New York’s Traffic Moonshot

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17 Years, $700 Million Wasted: The Stunning Collapse of New York’s Traffic Moonshot
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The last-minute implosion of congestion pricing, which was set to begin Sunday, shows the challenges of solving America’s most intractable problems.

NEW YORK—Patrons at the Comfort Diner in Midtown Manhattan recently encountered an unexpected person working the tables: Gov. Kathy Hochul.

Rather than take orders, she went booth to booth seeking opinions about the city’s first-in-the-nation plans for congestion pricing—a $15 toll on vehicles entering the core of Manhattan. 

Nobody realized at the time that the Democratic governor was heading toward a blockbuster announcement: she was about to scrap the program after years of planning and hundreds of millions of dollars spent. In one of the most consequential decisions in decades for America’s most prominent city, Hochul soon said she was indefinitely pausing congestion pricing—less than a month before it was set to take effect on Sunday, June 30.

The abrupt reversal, which some attribute to Hochul’s reluctance to impose a new fee in an election year, leaves metro New York grappling with a historic missed opportunity and fiscal mess. There is no relief in sight for the city’s traffic congestion, which is the worst in the world, according to data published last week. 

The epic collapse in New York shows how a fear of dramatic change can give the status quo stubborn power over those trying to solve some of America’s most intractable challenges. That leaves policymakers nibbling at the edges of deeply rooted problems, even after investing huge sums of money and political capital.

Blown up in a New York minute were plans for around $15 billion of planned improvements to the city’s ailing mass-transit system, the largest transportation network in North America. The reversal cast aside around $700 million in meticulous prep work, including a $555-million contract to install tolling cameras—which are already up and ready to go—and $33 million for a customer-service center with 100 employees who have already been brought on, officials said. Planners invested thousands of hours, including going to London and Stockholm to research their congestion-pricing programs, according to people familiar with the travel.

What was supposed to be a transformative moment when New York led the way and boldly tackled traffic congestion, air pollution and transit funding, has instead turned into a surprising loss for a broad coalition that includes major employers, real-estate developers and subway riders. 

Surprised by the reversal were Hochul’s own lieutenants, including Janno Lieber, a fierce champion of congestion pricing and the chief executive of the Metropolitan Transportation Authority. The MTA—which carries around 5.5 million passengers each day in the New York metro area—now faces a $16.5 billion-financial hole from the loss of money from congestion pricing and federal matching funds.

Just days after Hochul’s announcement, a beleaguered Lieber joined a conference call with advocates in which he said he was equally shocked and remained committed to the program, three people familiar with the exchange said. 

This is devastating,” he said, according to a person on the call.

This account of the rise and fall of congestion pricing is based on interviews with more than two-dozen officials, advocates and lawmakers who were involved in its development. While they were mixed on the merits of the program and whether Hochul was right to delay it, nearly all were astonished by the suddenness of her decision and how hastily it was rolled out.

A big idea

Notable New Yorkers had long pushed to join global cities—including London, Stockholm and Singapore—that are battling gridlock through congestion pricing. The general concept is simple: install cameras at key entry points and charge drivers to enter busy metro centers. This aims to fund improvements to public transportation—enticing more people to use it—cut pollution and boost health.

Then-Mayor Michael Bloomberg, a billionaire technocrat, first put it on the table in 2007 when he included congestion pricing on a list of items he felt could make New York more sustainable as the city’s population was surging. 

He pointed to London, which adopted congestion pricing in 2003. In a report the next year, officials there said the number of cars entering the congestion zone fell 18%, the amount of particulate matter in the air declined by 12%, more people rode buses and bus speeds increased by 6%.

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