NY Congestion Pricing Plan’s Fate Unclear After Court Ruling

(Bloomberg) — New York Governor Kathy Hochul said a plan to charge drivers entering Manhattan’s central business district will launch Jan. 5 as scheduled after a federal judge largely rejected New Jersey’s challenge to the congestion pricing program.

But a lawyer for the Garden State said New York can’t proceed while issues in the court fight remain unresolved, raising the possibility the plan could be held up by more legal jousting.

Judge Leo M. Gordon on Monday issued a mixed ruling that dismissed most of New Jersey’s concerns about impacts from congestion pricing, but he said a federal transportation agency must provide further explanation about its decision-making. While the 72-page decision doesn’t directly address whether the plan can go forward on its planned start date, the judge set deadlines for more court filings in January and February.

“Despite the best efforts of the State of New Jersey trying to thwart New York’s ability to reduce congestion on our streets while making long-overdue investments in public transit, our position has prevailed in court on nearly every issue,” Hochul said in a statement, calling the ruling a “massive win” for commuters in both states.

New Jersey’s lawyer, Randy Mastro, said the state “remains firmly opposed to any attempt to force through a congestion pricing proposal in the final weeks of the Biden Administration.” 

“There could not be a worse time to impose a new $9 toll, escalating over time to $15, on individuals who are traveling into downtown Manhattan for work, school or leisure,” he said in a statement.

In addition to New Jersey, the plan has spurred fierce opposition from some environmental groups, commuters and even President-elect Donald Trump, who has vowed to kill the program. New Jersey argued the plan would increase congestion and pollution by drivers looking to avoid the toll by using its bridges as alternate routes. 

The program aims to help the Metropolitan Transportation Authority raise $15 billion to modernize its transit system. It would charge $9 for most drivers entering Manhattan at 60th Street or below. It was designed to reduce traffic and pollution while raising money for the city’s subways, buses and commuter rails. 

The ruling adds to the tumult over the plan, which had been due to start on June 30 before Hochul indefinitely postponed it, citing inflation and financial pressures on workers, only to announce she was relaunching it with a toll of $9 instead of $15. 

New Jersey has called the plan a “brazen money grab.” The state challenged the federal government’s conclusion that it would have no significant effect on the environment and sued to force the Federal Highway Administration, which approved the project, to do a broader review. 

The US Transportation Department concluded that the effects of the plan could be mitigated. But parties that might be affected by the project can ask for a broader review, called an Environmental Impact Statement, which is more detailed and rigorous. 

Gordon rejected the argument that federal officials failed to assess environmental justice concerns in certain communities. But he found that the federal assessments “fail to provide a rational connection” between mitigation plans and how they resolve any environmental harms in New York or New Jersey.

The judge sent the plan back to the federal highway agency to better explain the connection and, if needed, to reconsider whether the program needs different degrees of harm mitigation for the Bronx and certain areas of New Jersey.

The Transportation Department is reviewing the ruling, a spokesperson for the department wrote in an email Tuesday.

The MTA’s chief, Janno Lieber, said in a statement he’s confident that new information from federal highway officials will put “to rest” New Jersey’s claims.

Representatives of the federal Department of Transportation didn’t immediately respond to requests for comment. 

Trump, who is set to take office on Jan. 20, has called the program a “massive business killer and tax on New Yorkers.” New York City Comptroller Brad Lander has warned that the incoming administration could try to end it through litigation or administrative action.

While the Federal Highway Administration’s next filing in the case is due three days before Trump takes office, additional filings are due beyond Inauguration Day.

Legal challenges to congestion pricing were also filed in New York, where two other federal judges declined to block it. Those lawsuits included groups representing a variety of city residents, workers and business owners. Unsuccessful bids to block the program were also brought by Rockland and Orange counties.

Separately, the town of Hempstead sued in state court, alleging that Hochul’s decision to restart the program was an illegal attempt to push it through before Trump takes office. A judge has set a January hearing for that case.

Because of the litigation risks, the MTA was planning to commit only $2.9 billion for capital projects this year, a sharp drop from the $12 billion of work it could otherwise enter into. A victory over New Jersey in court may help it put those upgrades back on track — if the plan survives Trump’s opposition. 

The case is New Jersey v. US Department of Transportation, 23-cv-3885, US District Court, District of New Jersey (Newark).

–With assistance from Michelle Kaske and Bob Van Voris.

(Adds US Transportation Department comment in third section.)

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