New York City’s congestion tolling set to take effect early next year

New York is poised to become the first U.S. city to charge drivers to enter an urban center after the city won final federal approval Monday for its congestion pricing plan.

The Metropolitan Transportation Authority will oversee the program. MTA Chair and CEO Janno Lieber said Wednesday that drivers could expect to see tolling by next spring.

“We literally hit the button on a notice to proceed for a contractor who designed that whole system, and who’s ready to build it out,” Lieber said on a local TV show.

The Federal Highway Administration gave final approval Monday after granting preliminary approval in May.

While several U.S. states have implemented High-Occupancy Vehicle lanes with variable tolls depending on the level of traffic, New York City would be the first to charge all motorists for driving into its core. The cities of London and Singapore have similar plans.

Other U.S. cities including Los Angeles, Boston, Seattle and Chicago are eying some type of congestion fee program.

“We are going to be the very first state in the nation, the very first city in America, to have a congestion pricing plan,” Gov. Kathy Hochul said Tuesday during a press conference. “Others will look at us. Other cities are paying attention. How is it going to work here? Well, we’re going to show them. We’re going to show them how you do this.”

A six-member Traffic Mobility Review Board will shape key factors like toll rates — expected to be between $9 and $23 — and exemptions.

Federal approval is required because some of the roads are part of the National Highway System and receive federal funding.

The MTA is one of the largest issuers in the muni market, with roughly $41 billion of outstanding bonds. The congestion tax is projected to generate $1 billion a year. The agency has said it would issue up to $15 billion municipal bonds backed by the new revenue, which would be in a lockbox, to generate $15 billion toward a $55 billion capital plan.