Hochul Halts Congestion Pricing in a Stunning 11th-Hour Shift

Gov. Kathy Hochul of New York announced on Wednesday that she was shelving the long-awaited tolling plan known as congestion pricing, just weeks before it was to go into effect.

“After careful consideration I have come to the difficult decision that implementing the planned congestion pricing system risks too many unintended consequences,” Ms. Hochul said, adding: “I have directed the M.T.A. to indefinitely pause the program.”

The move angered environmentalists, transit advocates and economists, with some accusing the governor of abandoning a plan that was decades in the making for political reasons in a critical election year.

The decision, Ms. Hochul acknowledged, was not an easy one, but nonetheless crucial in light of the lingering effects of the coronavirus pandemic on working families and New York City’s economy.

The congestion pricing plan, the first of its kind in the nation, was slated to start June 30. Drivers using E-ZPass would have paid as much as $15 to enter Manhattan south of 60th Street.

The governor said she feared that instituting a toll to drive into the borough would “create another obstacle to our economic recovery.”

“Let’s be real: A $15 charge may not seem like a lot to someone who has the means, but it can break the budget of a hard-working middle-class household,” Ms. Hochul said.

In the days before her announcement, the governor notified the White House and the top House Democrat, Hakeem Jeffries, of her plans, according to two people familiar with the conversations.

They disputed reports that Mr. Jeffries had directed Ms. Hochul to delay the plan, saying that he had remained neutral on the issue.

“To the extent immediate implementation of congestion pricing is being reconsidered, Leader Jeffries supports a temporary pause of limited duration to better understand the financial impact on working-class New Yorkers,” said Andy Eichar, a spokesman for Mr. Jeffries.

Word of the governor’s last-minute misgivings began to circulate in Albany on Tuesday night, and quickly sent shock waves through the New York State Capitol by Wednesday morning, the penultimate day of the legislative session.

Few lawmakers could say they loved congestion pricing and the optics of taxing constituents. But the proposal was championed by economists and environmentalists alike as the solution not only to the financial woes of the Metropolitan Transportation Authority, the state agency that runs New York’s subways and buses, but also the city’s infamous gridlock.

The program was also being contested in court by eight separate lawsuits, with plaintiffs including the Trucking Association of New York and Gov. Philip D. Murphy of New Jersey.

Mr. Murphy’s case in particular, which is being argued in Federal District Court in Newark, was regarded as the most serious challenge to congestion pricing. State officials are seeking a more comprehensive environmental study of the program.

But in New York, most Democrats had made a grudging peace with the plan after decades of debate, hearings, studies and planning — none more publicly than Ms. Hochul, who has defended it as a necessary step toward rebuilding New York’s economy.

Just two weeks ago, the governor told attendees at the Global Economic Summit in Ireland that implementing congestion pricing was critical to “making cities more livable.”

Many key players in New York politics, from Albany to New York City, expressed dismay at the reversal.

“I’m very upset that suddenly, out of the blue, this would pop up,” State Senator Liz Krueger, a Manhattan Democrat, said on Wednesday, adding: “If we stop congestion pricing now we’re never going to get it.”

Kate Slevin of the Regional Plan Association, a nonprofit urban research and advocacy group that has championed the tolling program, called the move “a total betrayal of New Yorkers and our climate.”

The president of the Partnership for New York City, Kathryn Wylde, said the governor’s decision was a disappointment and she hoped the pause would be only temporary.

Yet an undercurrent of support for Ms. Hochul’s move was also evident among lawmakers, particularly those representing swing districts.

“Many see it as welcome news,” said James Skoufis, a Democrat who represents Orange County in the State Senate, adding that despite the plan’s approval five years earlier, opposition had been growing in the Legislature. “Some of it is outspoken, some of it is quieter, but it is widespread.”

Shortly after Ms. Hochul’s announcement, U.S. Representative Pat Ryan, a Democrat facing a tough re-election race in the northern exurbs of New York City, sent out a statement taking partial credit for defeating the plan.

“Since Day 1, I’ve fought alongside countless Hudson Valley families against this unfair, uninformed and unacceptable congestion pricing plan,” Mr. Ryan said. “Today, I’m proud to say we’ve stopped congestion pricing in its tracks.”

Indeed, the plan has been largely unpopular in suburban areas of the Hudson Valley and Long Island where Democrats are desperate to make gains this cycle.

A Siena poll from April found that 72 percent of New York suburbs opposed congestion pricing. Statewide, the number is lower, but still a majority — including 54 percent of Democrats.

Transit experts say that such opposition is common among communities acclimating to tolling plans, but not always lasting.

“We know from the experiences of other cities that have implemented congestion pricing that public support is at its nadir right before implementation,” said Nicholas Klein, an assistant professor of city and regional planning at Cornell University. “That is when the public, media and politicians panic. But time and again, we see that the sky does not fall.”

In her address, Ms. Hochul stressed her commitment to public transit, and ensuring that the transportation authority had the funding it needed to complete long overdue capital projects. But she said that the city’s outlook had changed since the plan was approved in 2019.

“Workers were in the office five days a week, crime was at record lows and tourism was at record highs,” she said. “Circumstances have changed and we must respond to the facts on the ground.”

To halt implementation of the plan, Ms. Hochul needs only the approval of the authority’s board, which she controls. But without the projected $1 billion a year for the city’s buses and subways, the transit system could quickly fall into crisis.

Ms. Hochul could fill that gap, at least temporarily, with money from the state’s reserves. But she is also said to be looking at a more durable revenue source, in the form of a tax on city businesses, which would require the approval of the State Legislature.

In New York City, Mayor Eric Adams endorsed Ms. Hochul’s move. “I think that if she’s looking at analyzing what other ways we can do it and how we do it correctly, I’m all for it,” Mr. Adams said Wednesday at an unrelated news conference on Staten Island.

Mr. Adams, who has not been a strong proponent of congestion pricing, said he was worried that charging vehicles to enter Lower Manhattan would be an undue burden for “everyday New Yorkers” and potentially affect the city’s economic recovery from the pandemic.

“We have to get it right,” the mayor said, noting that he had been communicating with the governor over the last few days. “This is a major shift in our city and it must be done correctly.”

Reporting was contributed by Nicholas Fandos, Jeffery C. Mays and Claire Fahy.