US Department of Transportation Axes NYC Congestion Pricing

The department halted a NYC toll plan, citing no free option for drivers and its revenue-generating focus for a public transportation system.

Cars pass under a congestion pricing warning sign on George Washington Bridge as congestion pricing takes effect in New York City on Jan. 5, 2025. Kena Betancur/AFP via Getty Images

The U.S. Department of Transportation (DOT) has terminated approval for New York City’s Central Business District Tolling Program, ending the plan that charges drivers a new toll when entering Manhattan below 60th Street.

This decision rescinds a Nov. 21, 2024, agreement that had allowed tolls under the Value Pricing Pilot Program (VPPP), according to a statement from the department.

In a letter to New York Gov. Kathy Hochul, U.S. Secretary of Transportation Sean Duffy expressed concern that the toll structure ran counter to the principle of maintaining toll-free federal-aid highways.

“New York State’s congestion pricing plan is a slap in the face to working-class Americans and small business owners,” he said in a statement. “Commuters using the highway system to enter New York City have already financed the construction and improvement of these highways through the payment of gas taxes and other taxes. But now the toll program leaves drivers without any free highway alternative, and instead, takes more money from working people to pay for a transit system and not highways. It’s backwards and unfair.”

According to the letter, the toll authority was ended for two primary reasons. The first is that the plan provides no toll-free option for many drivers traveling in the affected zone.

The second is that the rate was designed largely to raise revenue for public transit, rather than strictly to cut back on traffic congestion.

Because of these issues, officials concluded that the pilot fell outside the scope of what is permitted under the VPPP.

MTA Chair and CEO Janno Lieber said in a statement that the MTA is suing the Trump administration over the move in the Southern District of New York.

The program “has already dramatically reduced congestion, bringing reduced traffic and faster travel times, while increasing speeds for buses and emergency vehicles—will continue notwithstanding this baseless effort to snatch those benefits away from the millions of mass transit users, pedestrians and, especially, the drivers who come to the Manhattan Central Business District,” Lieber wrote in a post on X.

“It’s mystifying that after four years and 4,000 pages of federally-supervised environmental review—and barely three months after giving final approval to the Congestion Relief Program—USDOT would seek to totally reverse course,” she added.

Hochul said on Wednesday afternoon that public transit is “the lifeblood” of New York City and “critical” to the city’s economic future.

“Broadway shows are selling out and foot traffic to local businesses is spiking. School buses are getting kids to class on time, and yellow cab trips increased by 10 percent. Transit ridership is up, drivers are having a better experience, and support for this program is growing every day,” she said in a statement.

“We’ll see you in court,” she added.

The tolls went live on Jan. 5. New York City’s Metropolitan Transit Authority hoped to use the revenue to fund extensive transit upgrades, including repairs, new elevators, and expansion of the subway system.

Supporters say that encouraging drivers to seek other travel methods could reduce pollution and traffic while generating money for projects essential to the transit network.

Opponents of the tolls counter that it places an unfair burden on commuters and businesses who already pay taxes to maintain the highways they use.

According to the letter, the DOT determined that the program placed “significant burdens” on workers and businesses while providing no viable free route into lower Manhattan.

Neighboring states, such as New Jersey, also raised objections, pointing out the new cost for drivers who regularly travel to the city.

The secretary’s letter cites longstanding federal rules that generally prohibit tolls on roads built with federal aid.

Although the VPPP allows limited exceptions to evaluate congestion-reduction strategies, the DOT concluded that cordon pricing of this nature goes too far. Additionally, the department objected to how the toll structure focused on revenue generation for transit, rather than setting charges primarily to minimize congestion on the highways themselves.

The DOT said that the Federal Highway Administration will work with local officials on an orderly end to tolling.

According to the letter, federal authorities found no compelling rationale for continuing to allow fees that do not align with the pilot program’s intended purpose. The secretary indicated that while some costs have been incurred by local agencies, the pressing need to remain within the bounds of federal law outweighs any reliance that those agencies might have on projected toll revenues.

According to the statement, New York can no longer collect fees under this pilot program, effectively reversing the short-lived cordon pricing plan until or unless a different legislative framework emerges.

The New York Department of Transportation and the New York City Department of Transportation did not respond to requests for comment from The Epoch Times before publication time.

Michael Washburn contributed to this report.