New York State Considers Tax on Drivers Entering New York City

Published April 11, 2018

New York Gov. Andrew M. Cuomo (D) is considering a proposal to charge vehicles entering Manhattan.

Citing a desire to alleviate traffic congestion and raise revenue for the Metropolitan Transit Authority (MTA), Cuomo’s “Fix NYC” task force recommends charging cars $11.52, trucks $25.34, and taxis and ridesharing services $2 to $5 per ride to enter Manhattan.

The proposal would make New York the first city in the United States to charge drivers for entering its downtown core. Drivers could avoid the fee only by entering Manhattan through either of the two city-owned East River bridges and bypassing the congestion zone.

Cuomo convened the task force after declaring a state of emergency for New York’s subway system last summer.

Budget, Congestion Problems

Declining ridership and skyrocketing costs have created a budget crisis for MTA.

“Before asking commuters to abandon their cars, we must first improve mass transit capacity and reliability,” the Fix NYC report states.

Traffic congestion in New York City is among the worst in the world, according to the report.

“New York City traffic congestion now ranks second worst among cities in the United States and third worst among cities in the world,” the report states.

The task force estimated heavy congestion in the New York City metropolitan area could cost the local economy up to $100 billion if not addressed over the next five years.

To alleviate traffic congestion, the report calls for the city to increase fees for traffic violations and impose new fees and parking restrictions on residents of the congestion zone.

Previous Effort Failed

The Fix NYC plan is not the first time New York lawmakers have attempted to solve traffic problems and fill MTA budget shortfalls simultaneously. In 2008, then-New York City Mayor Michael Bloomberg advocated a similar proposal that encountered a stiff backlash from New York residents and State Assembly members. The state House and Senate both declined to pass the Bloomberg-backed legislation.

Cuomo’s plan has already met resistance from New York City Mayor Bill DeBlasio, who says the fees will hurt middle- and lower-income New Yorkers. DeBlasio is promoting a tax on millionaires to close MTA’s budget gap.

Not Congestion Pricing

Randal O’Toole, a senior fellow with the Cato Institute, says Fix NYC’s plan is disingenuous and doomed to failure.

“New York City calls its proposal congestion pricing, but it is more accurately called cordon pricing,” said O’Toole. “Congestion pricing prices each road by an amount that varies by traffic levels so roads never get congested.

“Cordon pricing charges people to cross a line drawn around a city or portion of that city regardless of whether traffic is congested on the route or at the time they cross,” O’Toole said.

O’Toole says the proposal is not a long-term solution to the city’s traffic problems or MTA’s budget dilemma.

“Cordon pricing may provide a one-time reduction in traffic, but it does not provide long-term congestion relief,” said O’Toole. “Instead, it is more a fundraising tool, providing cities with income they can spend on wasteful urban monuments.”

Chris Talgo ([email protected]) is a marketing coordinator and editorial assistant for The Heartland Institute.