A historic congestion pricing plan for New York City was slated to go into effect this month. NY governor Kathy Hochul suddenly blocked it this week — and has taken tens of thousand of dollars in campaign funding from auto groups opposed to the plan.

New York governor Kathy Hochul speaks before US president Joe Biden delivers remarks at the Milton J. Rubenstein Museum in Syracuse, New York, on April 25, 2024. (Photo by Andrew Caballero-Reynolds / AFP via Getty Images)

Before her eleventh-hour decision to reverse course and “indefinitely pause” a landmark plan to charge drivers higher prices for clogging up Manhattan streets, Democratic New York governor Kathy Hochul received $36,000 from lobbyists for state automobile dealers. Half of that money came from a lobbying group that opposed congestion pricing, citing “consequences for dealers and the thousands of people they employ.”

As recently as two weeks ago, Hochul told world leaders at the Global Economic Summit that investing in public transit like congestion pricing is “what cities are meant to do.”

But on Wednesday, Hochul declared traffic reform was not in the best interest of New Yorkers.

“After careful consideration, I have come to the difficult decision that implementing the planned congestion pricing system risks too many unintended consequences for New Yorkers at this time,” she said during a news conference on June 5. “For that reason, I have directed the [Metropolitan Transportation Authority] to indefinitely pause the program.”

Hochul’s office did not respond to a request for comment on the auto industry donations.

The pricing plan would have charged a $15 toll for passenger cars in the city that were driving into Midtown and Lower Manhattan — New York City’s notoriously congested central business district — from 5:00 a.m. to 9:00 p.m. on weekdays. This plan was set to be the first of its kind in the United States after a nearly sixty-year push by transit advocates.

Supporters of the plan hailed it as a major step forward for transit policy in the United States, saying it could usher in a “transportation revolution” and serve as a model for other cities looking to fund public transit and improve air quality.

Many advocates also saw it as a way to raise funds for the city’s crumbling subway system. Last October, the head of the Metropolitan Transportation Authority (MTA), the public benefit corporation in charge of public transportation in New York City, called the century-old network “decrepit and struggling to accommodate the explosion in ridership.” The new traffic toll was expected to bring in $15 billion for the transit system.

But auto dealers expressed apprehension about the consequences for dealerships, as the plan was estimated to reduce the number of cars entering the central business district by 17 percent, or 153,000 vehicles.

In February, the Greater New York Automobile Dealers Association, a lobbying group for new car dealers in the New York metro area, noted in an email to subscribers that it had “concerns that the plan could harm businesses and employees within the proposed pricing zone, where nearly all Manhattan [Greater New York Automobile Dealers Association] dealers are located.” According to the email, the group submitted comments last September to the MTA opposing the congestion plan.

Two months before the lobbying group submitted this comment, it donated $18,000 to Hochul’s campaign, according to New York State elections disclosures. The same month the group submitted its public comment, the similarly named New York State Automobile Dealers Association, a statewide trade association for car and truck dealers, gave the governor $18,000 for her campaign. The two lobbying groups cohosted an event in May 2021 promoting jobs in the automotive industry.

Hochul has long been a major beneficiary of auto dealers. Since 2018, the Greater New York Automobile Dealers Association has donated a total of $92,700 to Hochul’s campaigns, including a $47,100 donation in October 2021, according to campaign finance records. The Automobile Dealers of New York political action committee has contributed almost $78,000 since 2018.

In a May email to its members, the Greater New York Automobile Dealers Association called Hochul a “staunch supporter of our industry.” On June 11, the lobbying group is hosting a reception for the governor in Queens. The event’s suggested donation amount is $5,000 or $10,000.

Hochul also received $5,000 last July from the Trucking Association of New York, which represents the trucking industry and is fighting in court to stop congestion pricing from taking effect.

Businesses dependent on car sales have been fighting tolls since the 1920s, with an industry publication declaring, “Roads: they shall be forever free!”

The governor touted the congestion pricing plan for months before her about-face, claiming in one statement last December that “this initiative will make New York City a global leader in transportation policy.”

But on Wednesday, Hochul reversed her position, noting in her news conference that “hardworking New Yorkers are getting hammered on costs” and that the decision to block the pricing program was made to protect workers and the “economic vitality of our city.”

The plan was set to go into effect June 30, and the governor’s reversal came as a shock, frustrating advocates who had fought for congestion pricing for years. “It’s a betrayal of millions of transit riders and the future of New York’s climate and economy,” one transit advocate told the New York Times on Wednesday.

The New York City Environmental Justice Alliance, an environmental justice advocacy group focused on the needs of low-income neighborhoods and communities of color, said it was “deeply disappointed” with Hochul’s decision.

“One year after our skies were covered orange and in the middle of a climate crisis, New York cannot desert plans that will reduce vehicular traffic congestion, improve public transit, and help us reach our climate targets,” the group said in a statement.

Congestion pricing would have mostly affected delivery trucks entering the city and people commuting by car into Lower Manhattan, which is mostly higher-income earners, according to an analysis by the city’s Department of Transportation.

The MTA also signed a $507 million contract in 2019 with a private company to install tracking and toll enforcement equipment in the Manhattan area for the pricing program. Some are suggesting the agency can’t now legally stop the congestion pricing program.

Along with pushback from the auto industry, New York’s congestion pricing plan had faced mounting opposition from other groups, including lawsuits from New Jersey residents and a Staten Island teachers union. New Jersey politicians publicly celebrated Hochul’s last-minute reversal.

In an MTA study of the thousands of public comments it received about the proposed congestion pricing plan, the agency noted that many of the comments were in support of the plan and “its ability to have a positive impact on the region.”

“Other public comments, however, pointed to specific concerns with Congestion Pricing, including the financial impact that the new expense would represent to certain individuals, businesses or industries,” the agency noted.

While no city in the United States has yet implemented such a congestion program, several cities around the world including London and Milan have successfully enforced congestion pricing for years. The pricing resulted in fewer traffic accidents in the two cities and a 16 percent reduction in carbon dioxide emissions in London, according to a recent report.

Hochul’s reversal comes as New York State struggles to adequately reduce its emissions. The state set “ambitious goals” in 2019 to reduce greenhouse gas emissions by 40 percent from 1990 levels by 2030 and by 85 percent from 1990 levels by 2050.

Currently, air pollutants in the city cause 2,400 deaths per year, along with thousands of emergency department visits and hospitalizations because of asthma and other heart and lung problems, according to an analysis published by the New York City government.

Hochul’s decision to stop the toll implementation was also allegedly motivated by the upcoming election and worries that the policy could hurt Democrats in the polls amid her growing presence on the national stage.

You can subscribe to David Sirota’s investigative journalism project, the Lever, here.

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