NY congestion pricing judge faults plan on New Jersey impact days before it is set to take effect

NEW YORK – A federal judge faulted New York’s plan to charge drivers entering Manhattan’s central business district over its impacts on neighbouring New Jersey, which could create a new obstacle for the congestion pricing programme days before it is set to take effect.

Judge Leo Gordon on Dec 30 issued a mixed ruling that dismissed some concerns raised by New Jersey, but also determined that federal transportation officials must provide more explanation about its decision-making.

The programme aims to help the Metropolitan Transportation Authority (MTA) to raise US$15 billion (S$20.4 billion) to modernise its transit system. It would

charge US$9 for most drivers entering Manhattan

at 60th Street or below. It was designed to reduce traffic and pollution while raising money for the city’s subways, buses and commuter rails. 

The ruling adds to the tumult over the plan, which had been due to start on June 30 before New York Governor Kathy Hochul indefinitely postponed it, only to announce she was relaunching it with a toll of US$9 instead of US$15. 

The MTA’s chief, Mr Janno Lieber, said the judge’s decision will not interfere with the programme that will start on Jan 5, 2025.

“We’re gratified that on virtually every issue, Judge Gordon agreed with the New York federal court and rejected New Jersey’s claim that the environmental assessment approved 18 months ago was deficient,” he said in a statement.

Representatives of the US federal Department of Transportation did not immediately respond to a request for comment. Representatives for New Jersey Governor Phil Murphy also did not immediately respond to a request for comment.

‘Money grab’

New Jersey called the plan a “brazen money grab”. The state challenged the federal government’s conclusion that it would have no significant effect on the environment and sued to force the Federal Highway Administration, which approved the project, to do a broader review. 

The Department of Transportation is required to review the environmental impact of any major project funded by the federal government, like the congestion pricing toll.

The agency concluded that the effects of the plan could be mitigated. But parties that might be affected by the project can ask for a broader review, called the environmental impact statement, which is more detailed and rigorous. 

Judge Gordon found that the environmental assessments “fail to provide a rational connection” between mitigation plans and how they resolve any environmental harms in New York or New Jersey.

The judge ordered the plan to be sent back to the federal highway agency to better explain the connection, and if needed, for it to reconsider whether it needs different degrees of harm mitigation for the Bronx and certain areas of New Jersey.

The decision does not directly address whether the plan can go forward on its planned start date, but the judge set deadlines for parties to file additional information on the mitigation plans that go into February.

US President-elect Donald Trump, who is set to take office on Jan 20, has called the programme a “massive business killer and tax on New Yorkers”.

Wave of litigation 

Legal challenges to congestion pricing were also filed in New York, where two other federal judges declined to block it. Those lawsuits included groups representing a variety of city residents, workers and business owners. Unsuccessful bids to block the programme were also brought by Rockland and Orange counties.

Separately, the town of Hempstead sued in state court, alleging that Mrs Hochul’s decision to restart the programme was an illegal attempt to push it through before Trump takes office. A judge has set a Jan 16 hearing for that case.

Because of the litigation risks, the MTA was planning to commit only US$2.9 billion for capital projects this year, a sharp drop from the US$12 billion of work it could otherwise enter into.

Its victory over New Jersey may help it put those upgrades back on track – if the plan survives Trump’s opposition. BLOOMBERG