Aerial view of Manhattan, New York City, New York, US. (Image: Adobe Stock)

The tolling system was called the Value Pricing Pilot Program (VPPP), and it charged drivers US$9 to enter Manhattan below 60^th Street starting on 5 January.

US Transportation Secretary Sean Duffy informed New York State Governor Kathy Hochul via letter that the tolling programme would be scrapped.

Duffy and the DOT said the lack of a fee-free option for motorists and the programme鈥檚 fundraising purpose were the main two reasons for terminating the pilot.

Duffy said, 鈥淐ommuters using the highway system to enter New York City have already financed the construction and improvement of these highways through the payment of gas taxes and other taxes. But now the toll program leaves drivers without any free highway alternative, and instead, takes more money from working people to pay for a transit system and not highways.鈥�

The DOT added, 鈥淭he toll rate was set primarily to raise revenue for transit, rather than at an amount needed to reduce congestion. By doing so, the pilot runs contrary to the purpose of the VPPP, which is to impose tolls for congestion reduction 鈥� not transit revenue generation.鈥� 

How does congestion pricing impact construction?

The Verrazzano-Narrows Bridge, which connects New York City boroughs Staten Island and Brooklyn. (Image: Adobe Stock)

The answer is not black and white, but past actions could offer insight, as this week鈥檚 federal termination may cause mild d茅j脿 vu: it鈥檚 not the first time the programme has been suspended or cancelled.

In June 2024, Governor Hochul used her executive authority to scrap an early iteration of the idea, which sought to charge motorists $15 when entering the toll area.

Hochul鈥檚 decision sent officials from the New York City Metropolitan Transportation Authority (MTA) into a panic, as the tolling programme was expected to generate around $16.5 billion for the agency鈥檚 five-year infrastructure and assets plan. At least two subway projects and one bridge ramp project (for the Verrazzano-Narrows Bridge) were thrust into uncertainty following Hochul鈥檚 11^th hour cancellation of the $15-toll plan.

Ultimately, Hochul approved the programme at lower toll rate.

However, terminating the pilot could (again) put a hole in the budget of the city鈥檚 MTA, which is still believed to rely on capital coming from the VPPP. At the time of Hochul鈥檚 cancellation in 2024, the MTA said it had already committed about $27 billion toward transit improvement projects (including upgrades for accessibility and general maintenance). 

Today鈥檚 fresh uncertainly is likely to push MTA into another round of financial planning and potential construction stops. Read more on potential project stalls here.

The saga is also unlikely to end with the DOT鈥檚 decision. MTA said in a statement, shared with Construction Briefing, that it will present a legal challenege to the programme鈥檚 termination. 

鈥淭oday, the MTA filed papers in federal court to ensure that the highly successful programme 鈥� which has already dramatically reduced congestion, bringing reduced traffic and faster travel times, while increasing speeds for buses and emergency vehicles 鈥� will continue notwithstanding this baseless effort to snatch those benefits away from the millions of mass transit users, pedestrians and, especially, the drivers who come to the Manhattan Central Business District,鈥� Janno Lieber, MTA chai and CEO, said.

鈥淚t鈥檚 mystifying that after four years and 4,000 pages of federally-supervised environmental review 鈥� and barely three months after giving final approval to the Congestion Relief Program 鈥� DOT would seek to totally reverse course.鈥�

3 New York City transit projects with an uncertain future after funding yanked A look at three New York City projects in jeopardy after plans for NYC congestion charging pulled