Nick Sifuentes, executive director of the nonprofit transportation advocacy group Tri-State Transportation Campaign, told Law360 on Friday that New York's Metropolitan Transportation Authority is at a "crisis point" and that it was more important than ever for the U.S. Department of Transportation to approve New York's congestion pricing plan. Federal approval is required for the plan because roads within the congestion zone receive federal assistance.
"The MTA's ridership has declined over 90% across subway and rail, and tax revenues that fund operations are expected to be billions short, even as they scale up cleaning and overtime to account for sick workers," Sifuentes said. "This year, the state budget allows the MTA to draw down funds from congestion pricing to fund operations, adding additional impetus for the federal government to act."
With the MTA asking for $3.9 billion in additional funding from the federal government, Sifuentes said a "key component" of its rescue should be fast-track approval of the congestion pricing plan. That could come in the form of an environmental review waiver or permission for the MTA to quickly proceed with a less time-consuming environmental assessment rather than a full and more time-consuming environmental impact statement, he said.
Federal law requires roads and highways constructed with federal money be free of tolls unless a federal statute says otherwise. There is an exception for congestion pricing which allows the Federal Highway Administration, or FHA, to approve pilot projects to toll federally assisted roads and highways to reduce congestion. But those approvals still require compliance with the National Environmental Policy Act
.In April 2019, New York lawmakers and Democratic Gov. Andrew Cuomo passed a budget that included the first congestion pricing program in the U.S., which would charge vehicles to enter the central business district of Manhattan.
The system is authorized to go into effect by Dec. 31, and funds were originally earmarked for the MTA's capital budget. But in the state budget plan approved this month, lawmakers and Cuomo changed the law to allow the MTA to tap congestion pricing revenue for operations in the 2020 or 2021 fiscal years to offset decreases in revenue caused by the coronavirus pandemic. The law requires the MTA to pay back those funds if it receives federal funds.
The MTA said it expects revenue decreases of $4.7 billion to $5.9 billion due to lower ridership, plus a significant decline in state and local revenue between $1.6 billion and $1.8 billion. In addition, the agency is expecting $800 million in costs for additional safety measures taken because of the pandemic. Outside observers have said the pandemic will delay congestion pricing until late 2021 or 2022.
In February, Cuomo said the federal government had not yet approved a congestion pricing plan for the MTA in New York City, saying the authority has had more than 12 meetings with the federal government and has tried to "jump every possible obstacle." He argued the plan wouldn't cost the federal government and implied it was being held because New York is a so-called blue state.
"This is a revolutionary-type idea. Other cities, other states are watching how congestion pricing works. It was debated for years in this state. We got it passed," Cuomo said. "The federal approval, frankly, we just assumed it was going to be almost pro forma. They're now using that opportunity to stop congestion pricing."
Cuomo's office didn't respond to requests for comment Monday.
Pricing for the congestion tolls has not been set. A six-member board will recommend tolls, exemptions and any credits for the congestion pricing system, with variable tolls to be charged once a day for each vehicle. The members of the board would be appointed by the Triborough Bridge and Tunnel Authority, which is part of the MTA.
Danny Pearlstein, a spokesman for the Riders Alliance, a transit advocacy group based in New York City, told Law360 on Monday that he thought there was a natural relationship between the MTA's request for federal aid and the potential approval of the congestion pricing plan.
"As we're asking the federal government for an unprecedented amount of money, we also have a proposal that's sitting before them that allows us to raise some of our own," Pearlstein said. "And our preference certainly is to get congestion pricing going in as robust a fashion as possible, as soon as possible and whether that comes from administrative approval or congressional approval, it has to come some way through the federal government."
Asked about the congestion pricing program, the FHA told Law360 that the proposed project would be the first "cordon" congestion pricing tolling program in the U.S. and therefore requires careful review. The agency said it's been working closely with New York and received supplemental information it requested from the state in January to help inform its decision on how to proceed with the Environmental Policy Act review process.
As part of that review process, the highway administration said it would conduct a comprehensive review of available information on the proposed project, which could include impacts on physical infrastructure traffic volumes, congestion levels, environmental and community impacts.
Ken Lovett, a senior adviser to MTA chairman and CEO Patrick J. Foye, told Law360 on Monday that the agency was still waiting for the federal government to make a decision on the environmental process, but while it was waiting, the MTA were doing all it could to move the project ahead. He said the MTA met with the FHA in October and asked for information, which it provided. A revenue study the FHA asked for in December was supplied in January, he said.
Lovett said the MTA told the FHA it was willing to do a longer environmental process if it could start it soon. But the federal government told the MTA if the state began the process without permission, comments made through the environmental process wouldn't count.
--Editing by Neil Cohen.
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