New York City will become the first US city to import London’s congestion pricing system as a way to raise much-needed funding for its ailing subway system.
The scheme is one of the key features of a compromise budget agreed by state assembly leaders and Governor Andrew Cuomo on Sunday. They estimate it would yield up to $15bn in dedicated funding for the Metropolitan Transit Authority over its next five-year capital programme, from 2020 to 2024.
“This budget delivers on our promise to develop sustainable funding for the MTA and addresses critical transportation needs throughout the state,” said Carl Heasty, speaker of the Democratic-controlled assembly.
The congestion pricing plan will involve electronic tolls for vehicles entering certain areas of Manhattan below 60th street, and will not take effect before 2021.
Congestion pricing has been a vexing issue for New York. It was promoted by the Bloomberg administration more than a decade ago as a way to ease traffic and environmental pollution.
Yet it repeatedly failed to gain traction because of opposition from suburban and outer-borough commuters, who complained that it would place an undue burden on them.
The crisis in the city’s subway, which has entered a reinforcing spiral of deteriorating service and falling ridership that has alarmed business leaders, has given congestion pricing advocates a new opening to argue for the policy.
Mr Cuomo, in particular, has asserted that congestion charging would provide a reliable source of revenue for the MTA, which is facing an estimated $40bn in capital needs to update signalling and other neglected infrastructure.
The governor has regularly cited the examples of London, Stockholm and Singapore to tout its benefits. “Obviously, we saw what London did and how it helped money go to the Underground,” one aide said.
In addition to congestion pricing, state officials also agreed a mansion tax to further support the MTA. It will have a top rate of 4.15 per cent on properties sold for $25m or more. The $365m it is forecast to generate will help to support $5bn in MTA capital expenditures during the five-year funding period, according to the governor’s office.