It’s said that if a lie is repeated often enough it becomes the truth. On this site we’ve talked about how a congestion pricing tolling scheme to fund the mismanaged MTA is a bad deal for truckers, small businesses and outer borough residents. So, as Governor Andrew Cuomo tries to strong-arm the New York Legislature into implementing Manhattan tolls in his just-submitted budget bill, let’s examine the ten biggest lies congestion pricing supporters use to sell this scheme.
- Congestion pricing will… reduce congestion.This is a lie right off the bat. Traffic is DOWN by about 10% each day from about 6 years ago. Increased congestion in Manhattan is due to the removal of traffic and parking lanes for bike and bus lanes, increased construction, and the explosion of for hire vehicles like Uber and Lyft. Congestion pricing does nothing to address these factors. In fact, by the Governor’s FIX NYC panel’s own estimates, travel speeds will only improve marginally from 6.8 mph to 7.4 mph. Buckle your seatbelts! Those who have no other options like trucks, or are disabled or who live in transit deserts, will still drive. Truck travel is non-discretionary and is dictated by the delivery time the customer requests and the building’s open hours. Besides truckers cannot haul freight on the subways.
- Congestion pricing will fix the MTA.The MTA is an unaccountable quasi-government agency that has been mismanaged for decades. Unless the organization is substantially reformed all “fixes” are nothing more than window-dressing. Throwing more money at this organization will only lead to more problems down the road. It is more accurate to call “Congestion Pricing” a “Debt Scheme” because the real plan is to use tolling revenue to secure $15 BILLION in new borrowing. This is on top of the $38 BILLION in bond liabilities the MTA already has. To put that in perspective, take the debt that bankrupted Sears and the debt that bankrupted Toys R Us and combine them, and it’s still only 1/3rdthe debt the MTA has RIGHT NOW. $53 BILLION in debt fixes nothing.
- Congestion pricing is progressive.Far from! Tolls and user fees are extremely regressive. Consider what the IRS says about regressive taxes: “a regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Tough true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume and travel. User fees often are considered regressive because they take a larger percentage of income from low-income groups than from high-income groups. These include fees for licenses, parking, admission to museums and parks, and tolls for roads, bridges, and tunnels.”
To support the “progressive” lie, a not-for-profit controlled by an MTA board member released a study saying that only a small percentage of “commuters” in lower economic groups drive to Manhattan (http://www.cssny.org/news/entry/congestion-pricing-css-analysis). Clearly measuring “commuters” only is deceiving as it implies going back and forth to a particular job each day and ignores those that need their vehicles for work, visit doctors or multiple job sites. As discussed above, those who drive into the zone are not fat cats who flaunt public transportation and they are not likely “commuters”. They are people with no other options like trucks making deliveries and those in transit deserts.
- Congestion pricing is needed because drivers do not pay their fair share. Really? The trucking industry already pays and pays and pays! Congestion costs the industry $4.6 billion a year. At Port Authority bridges and tolls, trucks currently pay $85-$105 depending on vehicle size. At the MTA bridges and tunnels, that cost is between $28-$46 per trip. Then there’s New York State’s Highway Use Tax. New York is the only state on the East Coast to charge this tax, which is based on miles driven. Then there’s the IFTA (International Fuel Tax) which is apportioned based on miles travelled within New York State, and the IRP (the International Registration Plan). Of course, there are fuel taxes collected with each fill up. Much of that money is supposed to be dedicated to improving and maintaining highway infrastructure but it is regularly raided by our elected officials for other programs. In NYC, there’s the Commercial Motor Vehicle Tax which imposes an up to $300 annual fee on each vehicle. And can’t forget about the parking tickets! Motorists paid about $600 million in parking and other fines in FY 2016. That number is only rising. The trucking industry, in total, pays about $1.2 billion in federal and state roadway taxes. Fair share? Truckers pay about 35 percent of all taxes paid by New York motorists even though trucks only drive about 7 percent of the total state-wide vehicle miles traveled. The typical 5-axle tractor-trailer pays $20,539 in highway user fees and taxes. These figures are over and above the typical taxes paid by businesses in New York. (Trucking costs provided by ATRI)
- Congestion pricing is needed to reduce emissions. As stated above, truck travel is non-discretionary and is dictated by the delivery time the customer requests. Truck emissions have been rapidly decreasing in the past few decades. New truck engines produce 98% fewer particulate matter and nitrogen oxide emissions than pre-1990 models. Sulfur emissions have been reduced by 97% since 1999. In fact, in New York City trucks only account for 10 percent of emissions while delivering about 90 percent of the freight. Not to mention, as electric trucks become cost competitive, emissions will be reduced further.
- Congestion pricing is the only option.Nonsense! There are plenty of other options. To list a few there’s upping the real estate transfer tax, to capture some of the value from multimillion-dollar co-op and condo sales; reinstituting a commuter tax; value capture where some of the profit from new developments can be taxed; and, of course, part of the revenue from pot sales and gambling. Most importantly though, the MTA must better monetize the assets they have now. The MTA sits on assets worth about $1 TRILLION. Yet only 3 percent of MTA revenue comes from income earned from those assets. Surely creative management and committed leadership could find ways to spin profit from those assets into a reliable funding stream. For years we were told that shutting down the L Train was the only option. Suddenly Governor Cuomo found another option when he realized how much pain the shutdown was going to cause. Don’t give in to propaganda, there are other options.
- Congestion pricing works in London.Let’s compare apples for apples. New York’s plan is a lemon compared to London. In London, ALL VEHICLES pay the same rate, although trucks that do not meet certain emissions standards pay more. The Congestion Charge is an £11.50 (that’s about $14.50 USD as of today) daily charge for driving a vehicle within the charging zone. The charge hours are limited to between 7:00 am to 6:00 pm, Monday to Friday. Vehicles are only charged once a day. Vehicles are charged even if they move within the zone. There are discounts available for fleets (about 10%) and deep discounts for residents if they can prove they live within the district. Autopay gets a £00 discount. There is a parking permit system with a weekly rate. London also invested heavily in transit BEFORE the congestion charge was implemented. There are also overnight truck parking facilities. And the tolls ring London. The plan in NYC is to NOT toll vehicles coming through the Hudson tunnels to and from NJ. As for whether London’s system works, consider this from The Independent, a London-based, on-line newspaper: “Some £819 million was generated from the on and off-street parking activities of the 353 local authorities in England during the 2016/17 financial year, research found. It represents a 10 percent leap on the 2015/16 surplus of £744 million. The upward path in profits is in part a reflection of the record number of cars and volume of traffic.”
- Congestion pricing is efficient.Besides being regressive, tolling is incredibly inefficient. Between 20-30 percent of tolling revenue goes just to build out the tolling infrastructure, administer and enforce the tolls. Also, this plan relies on cashless tolling. There are numerous problems with the cashless tolling system, such as sloppy data handoffs, unread EZ Pass tags, insufficient notices to motorists, and scant customer service. If as promised, traffic will go down after congestion pricing is implemented, won’t the collections be diminished also? Not without future toll increases we bet!
- Congestion pricing is good for business.It sure is… if you’re investment bankers selling the bonds to be financed with congestion pricing revenue, or for the private companies that construct and operate the tolling infrastructure and Conduent, the company that administers EZPass and oversees collections. Toll collection must be a great business… Conduent just paid its top execs $19 million in bonuses last year. Congestion pricing is also good for New York’s real estate industry. The real estate industry gets $7 billion/year in tax breaks for creating more density and congestion in areas already well served by public transport. With congestion pricing, they won’t be asked to kick in for the strain on the transit lines and road traffic they cause. Talk about using other people’s money!
For delivery firms who will have to pay the congestion pricing tolls, this is just another tax. Toll charges will be passed on to the merchants within the tolling zone, putting them at a competitive disadvantage to their counterparts outside the zone. Besides, if Manhattan tolls really reduce traffic, local merchants would see a reduction in customers. Its death by a thousand cuts for Manhattan small businesses and merchants. Eventually these costs will be passed to the consumers and Manhattan will continue to become a playground for the tourists and the wealthy.
- Congestion pricing will help seniors and the disabled.Toll advocates claim that congestion pricing revenue can be used to make stations more accessible to senior citizens and those with disabilities. Sounds nice but the MTA’s track record on accessibility is lousy. The Americans with Disabilities Act took effect in 1990 yet too many stations are still not accessible. The MTA found billions for building grandiose projects like the Fulton Center, the Second Avenue Subway and extending the Number 7 train to Hudson Yards yet, clearly accessibility, like basic maintenance or system upgrades, were not priorities. With no commitment to improving accessibility if they get another revenue stream, how can we be sure they’ll use the money for this purpose?
Over the years many funding sources have been sold as the long-term solutions to the MTA’s woes. A substantial portion of MTA bridge and tunnel toll revenue already goes to the subways, there are special real estate taxes, payroll taxes and taxi surcharges, to name a few. If you think that congestion pricing is the answer, we’ve got a bridge to sell you!