Bloomberg's Congestion Pricing Tax Gets Federal Boost?

The announcement that the federal government will provide hundreds of millions of dollars to New York City to implement a congestion pricing tax is expected to happen this afternoon.

An announcement will be made in Washington today by the federal transportation secretary, Mary E. Peters, who has said she will choose up to five cities to share $1.1 billion in federal money aimed at helping them fight gridlock by reducing traffic and promoting mass transit.

The official would not say how much money New York would receive. The official spoke on condition of anonymity because public discussion of the decision in advance of today’s announcement was not authorized. An aide to a member of New York’s congressional delegation said the Transportation Department notified his office of the decision yesterday.

Stu Loeser, a spokesman for Mr. Bloomberg, declined to comment last night.

The mayor’s plan was first aired in April as part of a package of proposals meant to guide the city’s growth in an environmentally sensitive way over the next two decades. The plan proposes to charge drivers $8 and trucks $21 a day to enter or leave Manhattan below 86th Street on weekdays during the workday. Those who drive only within the congestion zone would pay $4 a day for cars, $5.50 for trucks.

The congestion charging plan is designed not only to cut traffic, but to generate hundreds of millions of dollars in annual revenue that could be used to help pay for large-scale transportation projects.

The traffic plan drew opposition from politicians in the other four boroughs and the suburbs, which are home to many people who regularly drive into Manhattan.

In a last-minute compromise in July, days after what the city called a federal deadline for a plan, a special session of the State Legislature agreed to create a commission to study the mayor’s plan. Many of the 17 members would be chosen by Mr. Bloomberg, Gov. Eliot Spitzer and other officials who have supported the proposal.

Put another way, tax revenue collected from across the nation is being used to implement another tax, and an onerous one at that, on New York City metro region residents who drive into Manhattan. Those that pay tolls to get into Manhattan will essentially see those tolls increased to $8, while those who use the currently free bridges, will get hit with $8 for the drive during the week. Trucks will pay $21 per day (less whatever toll they're currently assessed). Overall, that means that someone who doesn't currently pay tolls will be hit with a $2,000 bill to drive into the designated area. Trucks would be hit with a $5,000 bill. Drivers who live in the affected congestion pricing zone aren't safe from being assessed either. They'll be hit with a $4 per day fee.

All this is being done in the name of raising hundreds of millions of dollars for mass transit and other transportation projects in the City. This comes at a time when infrastructure concerns are heightened over the Minnesota bridge collapse, and traffic in Manhattan is quite bad - which is a sign of the strong local economy.

Congestion pricing will change all that - people and businesses will chose to live and work/operate elsewhere, so the amount of traffic will decrease, but so will the business options and economic vitality of the region. That's simply unacceptable.

How long will it take for those responsible for the tax to realize that it isn't bringing in enough revenue for the planned projects because people simply are doing business elsewhere? In that time, the economic competitiveness of the City will go by the boards, and the tax will simply be another burden on those who have no choice but to pay the tax because those mass transit options have not been built.

As it is, the planned mass transit options will not even relieve existing congestion on mass transit running through the heart of Midtown, let alone those people who are estimated to migrate to mass transit options as a result of the congestion pricing plan implementation. The capacity simply isn't there, and Mayor Bloomberg (I) simply shrugs this off as a minor inconvenience.

At the same time, one has to wonder whether the MTA is up to the task of getting the infrastructure updated. They've known for decades about the inability to handle heavy rainfalls in short time periods, and yet have done nothing to upgrade the pumps or sewer systems necessary to keep the tracks clear. The issue of flooding goes back decades, and the problems from the past year are only a reminder that decisions made decades ago still haunt the system. Meanwhile, cost overruns and delays are threatening existing projects such as the Fulton Street terminal.

Simply throwing more tax money at the problem isn't going to improve the infrastructure. A critical examination of how the MTA is spending the money and whether it can be done more efficiently must be done. However, since those in a position of power to oversee the MTA have a vested interest in the status quo, I don't see that happening anytime soon.

UPDATE:
NYC got $354 million to implement the tax. Now, the matter goes to the panel of politicians to see how it should happen. The money is contingent upon the Legislature acting by March 2008 to implement a congestion pricing program.

UPDATE:
The NYT provides insight into what the feds actually provided in terms of the $354 million for NYC. It provides $10 million for congestion pricing, with the remainder going largely for bus and mass transit purchases. The City had been hoping for a whole lot more than that.

The federal funds would primarily be used for bus purchases and other improvements in mass transit.

The city had also applied for approximately $180 million to pay for the installation of a system that would impose a fee on cars entering the busiest parts of Manhattan. But the Department of Transportation, under the agreement announced today, contributed only $10 million to that initiative, leaving it up to the city to come up with the bulk of the funds for the so-called congestion pricing system.

Mr. Bloomberg, at a press conference shortly after the announcement, downplayed the lack of money for congestion pricing. An aide to Mr. Bloomberg said later the city may borrow the money to buy the cameras and other equipment needed.

“I think rather than look at the money we didn’t get we should look at the money we did get,” the mayor said. “It’s a unique opportunity for New York and we should really say ‘thank you.’ ”

Opponents of the fee on drivers, however, called the news a setback for the Bloomberg administration, and predicted it would be more difficult now for the mayor to win approval for his congestion pricing plan. Under the agreement with the city, the City Council and Legislature must sign off on the plan early next year for the federal funds to be released.

Yes, let's look at the money that Bloomberg was hoping for. It would go towards implementing one of the largest tax hikes in the City's history.

The idea behind congestion pricing is to change driver behavior, forcing people to reduce car usage in the City. There are other, less costly ways to achieve the same goal - without creating a whole new bureaucracy and infrastructure - and all the lost costs of creating those entities to oversee the implementation of congestion pricing.

Consider the possibility of changing parking meters to impose flexible charges - muni-meters could be installed in place of existing parking meters, but with the ability to change the price according to the time of day and even location. Taxes could be raised on parking garages to similarly deter drivers from entering the city during peak problems.

The problem with those items is that it simply doesn't give Bloomberg taxing power, which is what congestion pricing would have done. The State Legislature put its foot down because it doesn't like the idea of home rule and mayors able to wring out ever more money from taxpayers - that's the Legislature's purview.