New York to Charge Drivers to Enter Lower Manhattan in 2024

New York City will soon begin charging drivers to enter Manhattan to “help reduce congestion” and “improve air quality.”

The move marks a win for environmental activists but raises concerns over the impact on business owners, including taxi drivers.

Announcing the news in a press release, New York’s Democrat Governor Kathy Hochul said the Federal Highway Administration had given the green light to the state’s congestion pricing program.

The approval was granted following a 30-day public availability period assessing the environmental impact of the plan.

Hochul said the agency had found that the congestion program would have “no significant environmental impacts” and would reduce congestion and overall vehicle miles traveled, improving regional air quality.

Additionally, the program is expected to generate up to $1 billion in yearly financial support.

The money will go toward upgrading the city’s public transportation system, including subway, bus, and commuter rail systems operated by the Metropolitan Transportation Authority (MTA), Hochul said.

“Congestion pricing will reduce traffic in our crowded downtown, improve air quality and provide critical resources to the MTA,” Hochul said.

“I am proud of the thorough Environmental Assessment process we conducted, including responding to thousands of comments from community members from across the region.

“With the green light from the federal government, we look forward to moving ahead with the implementation of this program.”

The scheme was first proposed in 2007 but faced delays owing to the COVID-19 pandemic.

It has also faced intense scrutiny from senior officials, including New Jersey’s Democrat Gov. Phil Murphy.

According to Hochul, now that the toll program has been given the green light it could start as soon as May 2024, bringing New York City into line with places like London, Singapore, and Stockholm where similar tolling programs have been implemented in highly congested business districts.

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It is unclear exactly how much drivers would pay to visit popular parts of Manhattan.

However, under one of the tolling fee suggestions (pdf) currently being considered, drivers would be charged $17 during off-peak hours or $23 during rush hour to enter Manhattan south of 60th Street.

The exact tolling rate structure will be determined by MTA in partnership with the Traffic Mobility Review Board, officials said.

Democratic Mayor Eric Adams praised the new toll program on Tuesday.

Adams said the fees are about “more than just reducing traffic.”

“This will lead to more resources for public transit, cleaner air, and safer streets,” Adams said.

“Getting congestion pricing right also means ensuring that historically disadvantaged communities are not further burdened, and we are pleased to see that the environmental assessment now includes $155 million in investments to reduce truck pollution, improve asthma care, and expand parks.”

“We look forward to continued discussions with the MTA, our state partners, and the Traffic Mobility Review Board as implementation proceeds,” Adams said.

An assessment of the toll program (pdf) found that across the 28-county area studied in the environmental review of those who commute to work in Manhattan’s Central Business District, just 11 percent drive while more than 80 percent use public transportation.

The assessment also found that the toll program would reduce the number of vehicles entering the Central Business District by around 15–20 percent a day, or 110,000 to 143,000 fewer vehicles daily.

Overall, the pricing plan will help “support a greener future,” according to the assessment.

However, not everyone has welcomed the new toll, which comes as the increased cost of living is already squeezing households.

New Jersey officials including Murphy and Reps. Josh Gottheimer (D-NJ) and Mikie Sherrill (D-NJ) have all voiced concerns over the new toll plan.

They argue that the move will negatively impact New Jersey locals.

In a statement published on June 12, Murphy branded the congestion pricing program “poorly designed.”

Murphy says the plan was “devised without adequate input and regard for New Jersey’s interests.”

If the program is allowed to move forward, Murphy said, it will “unfairly toll New Jersey commuters while disproportionately burdening environmental justice communities in the Garden State.”

“We have always been receptive to a thoughtfully crafted congestion pricing proposal,” said Murphy.

“But we take serious issue with any scheme that is designed not to lessen congestion or pollution, but to line the coffers of the MTA on the backs of hardworking New Jerseyans.”

Taxi and ride-share drivers and their companies have also raised concerns about how the pricing scheme could impact their businesses.

Although some MTA proposals have included caps on tolls for taxis and other for-hire vehicles.

“Despite the limited environmental review conducted so far, what remains obvious are the severe and long-lasting detriments that will be endured not just by our commuters and transportation agencies, but by residents of environmental justice communities who will see traffic unfairly redirected into their neighborhoods,” Murphy continued in his statement.

“Until the appropriate environmental review is completed for a project that will literally affect millions of New Jerseyans, we will continue to evaluate every legal option at our disposal.”

READ MORE: New York City Launches Crackdown on Wood-Fired Pizzas to Reduce ‘Carbon Emissions’

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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