Congestion pricing toll collections begin in New York City

Congestion Relief Zone signage on Park Avenue in New York on Friday, before the tolls took effect Sunday.

Bloomberg News

The New York Metropolitan Transportation Authority activated congestion pricing on Sunday for vehicles entering lower Manhattan.

The launch of toll collections is a milestone for a program that was years in the making, beset by lawsuits and abruptly halted in June by New York Gov. Kathy Hochul three weeks before it was set to begin.

New York is now the first city in the U.S. to charge tolls for congestion. The revenue is planned to back $15 billion of bonds to pay for the MTA’s capital projects.

“The Congestion Relief Zone has been in operation since midnight – 1,400 cameras, over 110 detection points, over 800 signs and 400 lanes of traffic and it’s all gone smoothly,” said MTA CEO Janno Lieber on Sunday. “I hope drivers will take another look at the speed and convenience of mass transit.”

The program is intended to limit pollution and congestion and generate up to $1 billion annually for the MTA. The MTA projects that 80,000 fewer vehicles will enter the “Congestion Relief Zone” per day now that the toll is in effect.

Congestion pricing in New York was first proposed by then-Mayor Michael Bloomberg in 2007, but it took ten more years — until 2017’s “Summer of Hell” — for the idea to gain traction at the state level. The state assembly enacted congestion pricing into law in 2019, as a source of revenue for the MTA’s 2020-2024 capital plan.

The policy’s implementation was stymied first by the Trump administration, then by lawsuits.

Hochul halted the tolls in June, but resurrected them in November with lower tolls than originally planned. Hochul and the MTA raced to begin the program before President-elect Trump’s inauguration.

The base rate of the tolls that took effect on Sunday is $9, instead of the $15 that the MTA originally planned. The MTA can raise the toll to $12 in 2028, and again to $15 in 2031.

At the MTA’s November board meeting, CFO Kevin Wilens said the lower toll will likely delay the bonds from congestion pricing revenue. The agency initially planned to issue bonds about a year after activating the tolls.

“The strategy during the phase-in period is to time our bonding,” Willens said, “not only for the initial one year, but also as the revenue is ramping up, to issue the bonds as we need the cash for the projects and what the revenue stream can support.”

There are nearly a dozen lawsuits against congestion pricing still working their way through the courts. A lawsuit from New Jersey seeking to halt the tolls was struck down on Friday, although the state is seeking an appeal.

“Despite the best efforts of the state of New Jersey,” Hochul said in a statement last week, “our position has prevailed in court on nearly every issue. This is a massive win for commuters in both New York and New Jersey.”