Inside the furious debate over New York City's new tax on drivers, which New Jersey Democrats are fighting against tooth and nail

• Traffic, pollution, and a struggling mass transit system have all become increasingly urgent issues in New York City. 
• Gov. Kathy Hochul's plan to levy a new toll on drivers in Manhattan is being celebrated by environmentalists. 
• But New Jersey Democrats, among others, are up in arms over what they see as an unfair tax. 

Long gone are the days of eerily deserted Manhattan streets as New York City ground to a near-halt during the height of the COVID-19 pandemic.

Traffic is back in the most congested city in the country — and it's worse than ever before.

Delivery trucks are a big part of the surge, as the pandemic rapidly accelerated New Yorkers' demand for online shopping. Driving speeds, including for public buses, are way down.

At the same time, the shift to remote work means way fewer people are riding New York's subways and other public transit systems — a gut punch for the struggling Metropolitan Transportation Authority. 

To reduce traffic and pollution and boost funding for the city's subways, buses, and commuter rail, New York Gov. Kathy Hochul is championing a policy known as congestion pricing. 

The policy would impose a toll between $9 and $23 on drivers who enter Manhattan south of 60th Street and use the revenue to fund the MTA. It aims to reduce the 700,000 trucks, cars, and taxis that drive into the Manhattan zone by at least 10%, while simultaneously generating about $1 billion in proceeds per year to fund mass transit. 

The details of the so-called Central Business District Tolling Program still need to be ironed out. But this week, the Federal Highway Administration granted the MTA final approval to move forward with the policy. The next step is for a small panel appointed by the governor and mayor to decide what the toll prices would be and which drivers could be exempt.

While many New Yorkers, transportation experts, and city planners celebrated this week, critics — including Democrats across the river in New Jersey — say they'll do everything in their power to stop the plan. The situation has laid bare tensions between the commuters who regularly drive in the city, and those who are more concerned about the environmental impact of traffic and the possibility of reinvesting in transit infrastructure.

"New York's anti-environment, anti-commuter, and anti-business Congestion Tax is a cash grab to bail out the terribly mismanaged MTA," Democratic Rep. Gottheimer said in a statement to Insider.

New Jersey Sen. Bob Menendez said in a statement to Insider that he would "not stop fighting until we defeat this plan and ensure New York is not allowed to balance its budget on the backs of hard-working New Jersey families."

New Jersey's Democratic governor, Phil Murphy, is threatening to sue over the plan, which he and his allies say unfairly hits suburban commuters and burdens his state's mass transit system.

Even some of the staunchest congestion pricing advocates say some of the criticism is fair and there's a compromise to be found with New York's neighbors. 

Why supporters say it's a win-win for New York

Supporters of the first-in-the-nation congestion pricing policy say it would be a major victory for New York and serve as a model for other cities dealing with similar issues.

Charles Komanoff, a transportation analyst whose modeling was used to craft New York congestion pricing legislation in 2019, called it "the most exciting actual specific public policy idea that's in play and within reach for New York City and really any city in the country."

It also makes economic sense, Komanoff said. Driving, particularly in one of the busiest urban areas in the world, has major societal costs, ranging from pollution to traffic casualties.

"It is a policy of making prices tell the truth about costs and about resource constraints," Komanoff said. 

Congestion pricing is a win-win, Komanoff told Insider. If more drivers stay on the roads than expected, the city will rake in more revenue. If the toll keeps more drivers out of New York's business district than anticipated, there will be even less traffic and pollution than expected. 

New York's successful implementation of the toll, which could go into effect as early as next spring, could help embolden cities across the country and the world to follow suit, much as successful congestion pricing in London, Stockholm, and Singapore paved the way for New York.

"New York alone isn't going to solve our greenhouse gas problem, but multiply it by Toronto doing it and Mexico City doing it — Seattle, Los Angeles, Chicago, Boston, so many other places will now feel that they could get it through," Sam Schwartz, a former New York City traffic commissioner, told Insider. "If you can do it in New York, you can do it anywhere. If you can't do it in New York, you won't be able to do it anywhere."

Outrage and opposition in New Jersey

Last year, the MTA released an in-depth assessment of seven versions of the congestion pricing plan. Multiple scenarios involved charging the full toll for drivers who enter lower Manhattan from New Jersey by crossing the Hudson River through the Holland and Lincoln Tunnels and the George Washington Bridge, all of which already levy their own tolls. 

New Jersey lawmakers seized on this double tax as a central sticking point, with Sen. Menendez, and Reps. Gottheimer and Bill Pascrell saying in a joint statement this week that these drivers should be exempt from the congestion tax. 

Komanoff said most congestion pricing advocates agree — they don't want drivers who enter lower Manhattan through the tunnels to pay the full congestion toll. He and Schwartz would like to see the tunnel toll deducted from the congestion fee. 

Komanoff blames the MTA for a "bungled" policy roll-out that has stoked a massive, avoidable outcry, particularly from New Jersey politicians. He also argued that the MTA significantly undercounted the number of cars that will leave the roads, thus exaggerating the amount of diverted traffic and pollution New Jersey and the outer boroughs will face. 

"The whole thing would have been so much less virulent and less vituperative," he said, calling the double fees on tunnel drivers "really poor public policy" and "a basic fairness thing." 

Schwartz also said he's open to New Jersey getting a cut of the congestion toll revenue proportionate to their contribution.

"If Gov. Hochul and Murphy got in a room, they could iron it out," Schwartz said.

Still, congestion pricing advocates say New Jersey politicians are taking their criticism too far and those who consider themselves environmentalists should use the opportunity to improve mass transit and get their residents out of cars. 

"New Jersey recently released an ambitious set of climate goals — reducing car usage is a key component to climate action, and congestion pricing in New York City will encourage New Jersey residents to leave their cars at home, benefiting their home state as well," Sarah Kaufman, interim director of New York University's Rudin Center for Transportation, told Insider. 

Disagreement over exemptions

Schwartz argued that it's hypocritical of New Jersey to demand exemptions from other states' tolls, when the Garden State charges a slew of fees on drivers passing through the state. 

"These elected officials in New Jersey tout what great environmentalists they are. They claim that double-tolling is anti-American, whereas no place has more double- and triple-tolling than New Jersey," Schwartz said. "If they're looking for some exemptions, I think New Yorkers should get exemptions in New Jersey."

Taxi and for-hire drivers are also staunchly opposed to any congestion fee. Many congestion pricing advocates, including Komanoff and Schwartz, want exemptions for both taxi and ride-hail drivers, with yellow cab drivers paying nominal or no additional tolls. 

Critics have also raised concerns about the policy potentially increasing traffic and pollution outside Manhattan, particularly in marginalized communities in the Bronx. 

Komanoff suggested that New Jersey lawmakers take a page out of Democratic Rep. Ritchie Torres' book. 

Torres, who represents parts of the Bronx, condemned the policy last year after an MTA environmental assessment showed it could divert traffic into the Bronx, increasing pollution in an area already struggling with poor air quality and high rates of asthma. But since then, he's extracted big environmental wins for his district, including tens of millions of dollars to electrify diesel-powered refrigeration trucks, install air filtration systems for schools, and upgrade parks, among other measures. 

This spring, Torres came out in support of the policy and spoke at Hochul's announcement ceremony on Tuesday. 

"He bargained hard and he got from the MTA and the governor what looks like an ironclad promise," Komanoff said. "He is helping to deliver congestion pricing for the city — and which will benefit his district — and he's delivering these remediations that his district needed and deserved anyway. So it's just effing brilliant." 

But congestion pricing still has a long way to go, particularly as long as New Jersey leaders stand in the way. 

"I'm not breaking out the champagne yet," Schwartz said.