The Politics of Congestion Pricing
What we can learn from New York's failure
On Wednesday, New York Governor Kathy Hochul unilaterally paused the planned congestion pricing in the lower half of Manhattan. The program would tax drivers who crossed into Manhattan below 60th Street in order to fund public transit projects. Proponents claim this would reduce congestion and gridlock, incentivize public transit use, lower carbon emissions, and help fund repairs to the city’s transit infrastructure.
Hochul is a supporter of the policy who paused implementation for purely political reasons: congestion pricing was unpopular in the suburbs and she was worried about the House swing districts this November.1 On face value, there’s some logic to this: 72% of voters in these suburban swing districts opposed congestion pricing, primarily because they would be the ones who paid the tax when they drove into Manhattan. One could argue that Hochul was scrapping a policy that she personally favored2 in order to help support the broader Democratic Party. This is flawed and short sighted thinking. The short term impact of this decision will be to help Republicans in tight congressional races, and the long term cost will be crippling to the city’s transit infrastructure.
The life cycle of congestion pricing polling
David Meyer from Streets Blog has an excellent overview of how public opinion has changed in cities which implemented congestion pricing: first the proposals may be mildly unpopular, then as implementation approaches they become extremely unpopular, and finally once the public sees the changes enacted, they actually grow to love the policy. People constantly complain about traffic, noise pollution, and crowded streets: this is an easy way to create meaningful lasting solutions, and accordingly voters grow to love it.3 In Stockholm, support for congestion pricing at implementation was below 40%, but within seven months it was up to 52% and within four years it was up to 70%. Similarly, London saw it’s support go from 40% to a majority within eight months. Notably, no city which has implemented congestion pricing has ever gotten rid of it.
This suggests that rather than delaying implementation, Hochul should have been rushing to get congestion pricing done on time, so voters have time to experience it before they vote in November. Maybe New York City will end up being the only city in the world where congestion pricing doesn’t turn out to be quite popular once it’s implemented, but that seems deeply unlikely.
Instead, Hochul has frozen the program at the exact point when it is least popular, indefinitely. To put a fine point on it: the state of New York has spent the past few months getting people ready for the change by advertising the tax with billboards and ads, guaranteeing that commuters hear about it. They are spending state money to advertise an unpopular policy that no one will end up benefiting from. By neither killing nor implementing it, she has guaranteed that it remains a live issue for Republicans to use in their races, but that voters will never see the benefits.
Don’t give your opponents free wins
Every Republican congressman in the area has been fighting tooth and nail against congestion pricing. They now get to run on how they were successfully able to pause the program. They can even argue that re-electing them is crucial in order to permanently kill the program. It is bad to give your opponent free wins on issues that are very popular.
Worse, House Democratic candidates can’t even meaningfully claim credit because she made the decision unilaterally. Maybe if she wanted to help their races, she could have had them speak at the press conference to announce the decision, or talked about how it was a conversation with Josh Riley or Mondaire Jones or Pat Ryan that changed her mind.
She is also helping Republicans by increasing the issue salience. There are plenty of issues where voters trust Republicans more than Democrats which don’t actually move votes. An issue that is polarizing but low salience is unlikely to sway an election. Tom Suozzi handily beat Mazi Pilip in the February special election to replace George Santos, despite Pilip’s efforts to use the unpopular congestion pricing as a cudgel. But by creating a massive news cycle about congestion pricing, Hochul is drastically upping the salience of the issue.
Hochul has taken this from a relatively low salience unpopular issue to a highly salient unpopular issue where Republicans can credibly claim a victory.
The money has to come from somewhere
Congestion pricing was set to raise an estimated $1 billion each year to fund transit infrastructure. That money still has to come from somewhere, and Hochul is scrambling to find a way to fill the hole. Her first proposal was a payroll tax increase, which was predictably deeply unpopular. A key feature of the congestion tax in Manhattan is that most people don’t drive in Manhattan. The majority of city residents don’t even own a car, including a staggering 76% of Manhattanites. That number is surely even higher among those living below 60th Street. Most people who work in NYC commute using public transit. Studies estimated that only 1.5% of commuters would end up paying the congestion tax, and that they would be disproportionately wealthy.
Replacing a tax that only affects a wealthy 1.5% of a given population with a tax that affects all workers4 is bad policy and bad politics. It’s regressive, and it will likely be deeply unpopular. We never got to see how unpopular it would be though, as state lawmakers made their displeasure with Hochul’s plan known immediately, and the payroll tax plan was killed within hours of being announced.
Hochul has now created a problem where she can be dinged for supporting a tax on all NYC workers and still needs to find a billion dollars annually to fill the transit budget deficit. There’s pretty much no way to do so in the long run without raising taxes or cutting services, neither of which will be popular. She’ll attempt to do this with a hostile legislature whose bill she just sabotaged in an increasingly critical media environment as we get closer and closer to the election. If Hochul thought congestion pricing was unpopular, she’s in for a rude awakening.
All the normal reasons you shouldn’t piss of your base voters
The congestion pricing plan was the result of fifteen years5 of hard work by thousands of activists, legislators, city, state, and federal employees, and more. There is a significant constituency for it among Democratic base voters who care passionately about climate change and reducing carbon emissions. It is good policy, and there’s a reason that the state legislature passed it. Unilaterally spiking policies which were duly passed by the legislature and signed into law is bad, and arguably illegal. It’s easy to imagine those voters being turned off by Hochul’s decision, and she has all but guaranteed that she will face a strong primary challenge for her own re-election in 2026.
The big picture
Hochul’s decision falls into a pattern of New York Democrats being overly reactive to GOP messaging and handing their opponents free wins out of a misguided sense that voters will reward them for shifting to the right.
New York City would have been the first American city to implement congestion pricing. It was intended as a test case to prove that congestion pricing can work in car-centric America. It works elsewhere: Singapore, Stockholm, London, Milan, and dozens more. But America has long been resistant to congestion pricing, and New York City would have been the ideal proving ground for the concept due to its density, transit infrastructure, and relative lack of drivers. New York City’s delay will spill over to other cities who were waiting for NYC to succeed first.
Ultimately though, this is a story about political power and what to do with it. One school holds that you accumulate political power in order to use it: we win elections in order to change policy and improve people’s lives.6 Hochul takes the other track: winning elections in order to keep winning elections in the future.
Which brings me to the final thing that I’m worried about: Hochul delayed the congestion tax because she is worried about the 2024 House elections. What happens when we fast forward to 2025 and it is suddenly her own re-election cycle? She had a famously close 2022 election to win her first full term. Will she again choose to kick the can down the road to protect her own re-election odds? I hope not, but I’m not going to hold my breath.
Housekeeping
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Last Week: How Not To Reply To A Bad Press Story
This has national implications: four of the state’s swing districts are in the suburbs, and there’s arguably an additional one in Northern New Jersey. Given the tight current margin in the House, it is not an exaggeration to say that the Speaker’s gavel runs through the NYC suburbs.
As recently as two weeks ago, she was bragging to the Pope about how great the plan would be:
There’s a natural parralel to the ways that Obamacare or Medicare started off as politically toxic, but as voters experienced the benefits they become basically untouchable.
The NY regional mobility/payroll tax currently affects all employers in New York City and Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam Counties. It’s unclear whether Hochul’s proposed hike would affect all of those places or just NYC specifically, but given how many suburban residents work in the city, the whole region would be affected.
Arguably longer — Mayors John Lindsay and Ed Koch both supported efforts to limit the number of cars which enter Manhattan in order to help the city become compliant with the Clean Air Act.
Look to governors like Gretchen Whitmer in Michigan or Tim Walz in Minnesota.