The Empire Review
Welcome to the Empire Review, the legal series that gives you a front row seat inside the courtrooms shaping New York.
The Empire Review
The Battle Over New York's Congestion Pricing
Congestion pricing, New York City's ambitious plan to tackle its overwhelming traffic problem, stands at a pivotal crossroads after decades of failed attempts. This deep dive explores the legal battles, environmental assessments, and underlying tensions that have made this solution simultaneously necessary and controversial.
The 2019 Traffic Mobility Act authorized a plan with three clear objectives: reducing vehicle traffic below 60th Street in Manhattan, decreasing vehicles entering the district, and raising $15 billion for public transit improvements. Despite these seemingly beneficial goals, 64% of New Yorkers oppose the plan, viewing it as a financial burden rather than an environmental solution.
Through meticulous analysis of the 958-page environmental assessment and court proceedings, we uncover how sophisticated traffic modeling predicted both benefits and challenges. While the Central Business District would see 15-19% less traffic, areas like Staten Island and the Bronx would experience increases, raising crucial environmental justice concerns. The government's response? A $155 million mitigation package and financial assistance for low-income drivers.
What makes this story particularly compelling is the zero-sum nature of the conflict: if implemented, opponents lose; if abandoned, supporters lose. Meanwhile, $556 million has already been spent on implementation infrastructure, with abandonment estimated to waste $700 million in taxpayer resources.
Beyond the legal arguments lies a deeper question about the hidden costs of the status quo: $5-6.5 billion annually in lost productivity and $2 billion in wasted fuel. Against this backdrop stands the MTA's troubled history of cost overruns and inefficiency, contributing to public skepticism that this new revenue stream will actually deliver promised improvements.
Curious about how this battle between traffic relief and financial burden will reshape New York's transportation landscape? Listen now to understand the full complexity of what might be the most consequential urban mobility decision in decades.
Welcome to the Empire Review, a series that analyzes the consequential lawsuits shaping New York. I'm Jonathan Arias. Thanks for joining me Now. In this segment, we'll cover the legal disputes surrounding congestion pricing, new York's ambitious plan to battle its overwhelming traffic problem. Now, the origins of congestion pricing date back several decades ago, but we can start in the 1950s, when economist William Vickery first proposed such a plan to address street congestion. Since that proposal, the city has attempted to implement the plan, first in 1973 under Governor Nelson Rockefeller and Mayor John Lindsay, and again several decades in 2007 under Mayor Michael Bloomberg, with both attempts failing for the same reasons. They are unpopular now. Despite these historical hurdles, the state is attempting again In 2019,.
Speaker 1:New York's legislature passed the Traffic Mobility Act, setting three goals One, reducing the miles traveled by cars in the Central Business District, which is the area below 60th Street in Manhattan. Two, reducing the number of cars entering the district. And third, raising $15 billion over several years for public transportation capital projects, all of which should improve our air quality. Despite these promised benefits, such as less traffic, less pollution and better public transit, most people don't view this plan as beneficial. In fact, they view it more as a money grab, making it unpopular. According to a poll by Siena College Research Institute, 64% of New Yorkers oppose this plan, with the most opposition coming from folks in the commuter suburbs. Unsurprisingly Anecdotally, in my everyday experience I haven't heard much or any support for it, only strong opposition, with folks complaining that they'll need to leave New York over yet another cost increase. Okay, so let's draw out all the different parties to keep us organized, because it will get complicated.
Speaker 1:Now the parties against the plan are residents of Battery Park City, new Yorkers Against Congestion Pricing Tax, which is a civic organization representing several people across New York, the United Federation of Teachers, the state of New Jersey, as well as several counties within it, the Trucking Association of New York. Now these parties are essentially making the same argument that the government and their plan violates the National Environmental Policy Act, which I'll elaborate on a bit later. The second argument is that the study informing the plan is flawed. The third is that the plan failed to consider alternatives, as required by the environmental law, and that the plan fails to properly mitigate some of the environmental consequences that will fall on areas where traffic will divert. Now, more granularly, the Truckers Association argues that the plan violates the Commerce Clause of the Constitution, which gives Congress the power to regulate commerce. Now they say that this plan discriminates heavily against this industry because their trucks would pay the most, despite their volume of vehicles on the road being the least.
Speaker 1:Now, putting these legal arguments aside, everyone is basically concerned that this plan will hurt them financially. From the outer boroughs say it's too costly, and the truckers warn that they'll be forced to pass on the cost of these tolls to their struggling small businesses in the tolling area. Now, aside from the cost, they also worry that vehicles will divert through their neighborhoods to avoid the tolls, which means that congestion will increase in their respective areas. On the other side, those in support stands the Riders Alliance, the Sierra Club and the New York City Environmental Justice Alliance, together under the same lawsuit. All these groups describe themselves as non-profits and civic groups representing the thousands of bus and subway riders throughout New York. Their legal arguments are that the governor's decision to stop the plan violates the state's Climate Leadership and Community Protection Act, which is a law aimed at reducing carbon emissions to address climate change. They also say that her stop violates the environmental rights amendment of the New York State Constitution, which says that each person shall have a nonprofit and also represents transit riders. Their legal argument is that the governor's pause violates the Traffic Mobility Act, the law that authorized the congestion pricing plan. Now, more specifically, they argue that a reading of the law says that the governor essentially has no authority to stop the program. Now, all of these civic groups make the same core arguments as their opponents, but in a different fashion that not implementing the plan will lead to more pollution and congestion in their areas. They also argue that public transit will continue to deteriorate if it doesn't receive the funds from the tolls.
Speaker 1:Now, in this segment, I'll focus the most on the lawsuits filed by the three opponents Battery Park City, new Yorkers Against Congestion Pricing and the United Federation of Teachers. Since their lawsuits were consolidated and because a judge issued a decision on it, the opponent's primary legal argument is a procedural one, meaning that they challenged the way the state and federal government reached their decision. They all argue that the government didn't adequately study the environmental consequences of its plan, as they are required to under a major environmental law, of its plan, as they are required to under a major environmental law. Now, to understand this, we need to break down a few key points. First, you might wonder why the federal government is even involved in a city traffic plan. Now, on the government side, the agencies and you have to bear with me on this one the agencies involved are the US Department of Transportation, the Federal Highway Administration, the MTA, the Triborough Bridge and Tunnel Authority, the State Department of Transportation and the City Department of Transportation Several organizations. They all collaborated during this process. Now the federal agencies are involved because some roads in the city subject to the plan are part of the federal government. Since the plan would affect federal highways, it would need federal approval. Specifically, the Federal Highway Administration must approve the plan under a program called the Value Pricing Pilot Program. That was a mouthful Okay.
Speaker 1:This federal involvement triggers the National Environmental Policy Act, or NEPA for short. Enacted in 1970, nepa is a cornerstone of US environmental law. It requires federal agencies to assess the environmental effects of their proposed actions before making decisions. Now the goal is to ensure that the environmental impacts are considered in the planning process. Under NEPRA, there are different levels of environmental review. The most comprehensive is a report called an Environmental Impact Statement, or short for EIS. An EIS is a detailed study that thoroughly examines the environmental consequences of a proposed action. It's required for major federal actions that are likely to significantly affect the human quality of the environment. The quality of the human environment, excuse me. An EIS involves extensive analysis as well as public input, and often takes several years to complete. Now, in contrast, an environmental assessment or an EA, is a shorter, less detailed review. If the EA concludes that the proposed action won't have a significant environmental impact, the federal agency can issue what's known as a finding of no significant impact, or FONSI for short, instead of proceeding with a full EIS. So in this case, the Federal Highway Administration and the Department of Transportation, as well as all those other agencies, conducted an environmental assessment the shorter version and shared the results in a document that's not so short and spans 958 pages. This report ultimately determined that congestion pricing would not have a significant environmental impact, making the need for a more detailed environmental impact statement unnecessary.
Speaker 1:The plaintiffs argue that this wasn't sufficient. They contend that the proposed impacts of the plan are significant enough to warrant the more detailed EIS. They believe that the more rigorous EIS process would reveal important environmental consequences that the shorter EA may have overlooked or underestimated. Now, when I first read this argument, I seriously wondered how a 958-page report conducted over four to five years was not enough, and I also wondered how much more this plan needs to be studied. But putting that aside, new York City is one of the largest, most dense metropolises in the entire world in the entire world. So the extent of how this plan is studied is extremely important, because they will have significant effects, whether they are positive or negative.
Speaker 1:The previous argument, as I said, is a procedural one. You can view it as a technical defense of sorts against the plan. What the plaintiffs are truly worried about, in my opinion, is that traffic will divert through their neighborhoods, bringing noise and pollution, since drivers will naturally find ways around the tolls. According to the Environmental Assessment, average daily traffic and congestion would increase on Staten Island and the Bronx, as well as certain areas in New Jersey, for example, on Staten Island and the Bronx, as well as certain areas in New Jersey, for example, on Staten Island highways. The report found that traffic would increase by 2.8% under a situation where all vehicles are charged between $5 and $9. And on the Cross Bronx Expressway. All situations entertained by the governments showed increases in traffic. All situations entertained by the governments showed increases in traffic, with the 2% increase being the highest. Under these findings, the plaintiffs are essentially asking how could all this increased traffic in our neighborhoods not have a significant environmental impact? A 2.8% increase in traffic translates to thousands of cars more cars rolling through our neighborhoods, emitting much more pollution. Since this is the case, you need to conduct further study, as required by the law.
Speaker 1:And finally, the Battery Park City residents argue that they were completely ignored in the study, which mentions Battery Park City only a few times. They too worry that traffic and pollution will increase in their unique nook of the city as cars will divert through the West Side Highway, which would not be told. Now, what makes these arguments powerful, in my opinion, is the way it describes actual people and what will happen to them if the plan is put into effect. For example, one of the complaints identifies a man with the initials LB who resides on the Lower East Side and says that increased traffic on the FDR will worsen his wife's neurological and cardiac issues. It identifies a 76-year-old man, also a resident of the Lower East Side, who also deals with certain health issues. And it identifies an asthmatic music teacher who teaches in the Bronx and cannot travel on train with her heavy musical equipment. These complaints, you know they don't mention nebulous people living in the South Bronx or commuters from Staten Island, but actual humans who would be affected. You may be one of them, or certainly no one.
Speaker 1:The other side, the side that supports the plan, makes the same powerful argument. For example, the city club mentions that one of its members is an elderly Vietnam veteran who uses a wheelchair to get around. It mentions that his neighborhood, hell's Kitchen, has supposedly the third worst air quality in the city. The Writers' Alliance identifies a senior woman who is undergoing cancer treatment and lives near the Queens Midtown Tunnel Portal, another heavily polluted and congested area. As you can see, the difficulty of this policy is that the parties are proposing a sort of zero-sum game. If the plan is implemented, the opponents will lose, and if the plan is not, the supporters will lose.
Speaker 1:The second core argument is that the plan is financially burdensome, particularly for low to moderate income drivers who live in public transit deserts or otherwise rely on their cars. This too is a salient argument, especially in this current era of inflated prices. To back up this claim, the plaintiffs here again point to the environmental assessment, which itself found that a disproportionate negative financial effect would fall on low-income drivers to the district who don't have a reasonable alternative to driving. Just as the complaints identify people who will suffer health-wise under the plan, they also sagaciously highlight people who will suffer financially. To give you one example, one of the complaints identifies a man from Staten Island who says it will take him two hours to commute by public transit to his job as a special education teacher in the city as a special education teacher in the city and that it will cost him $3,000 yearly to commute by car, an amount he says he cannot afford, which is truly reasonable. The United Federation of Teachers asserts the strong point that they represent perhaps the most underappreciated segment of public sector workers teachers who obviously don't earn the salaries of investment bankers or corporate lawyers. They argue, for example, that they are shouldering the burden of this crazy city plan and estimate that their commuting expense will increase by $74 a day at least under one tolling scenario. New Jersey and the several counties also make the same arguments.
Speaker 1:When the court hears a challenge to a government agency's actions on the NEPA, it applies a specific legal framework. Nepa is often described as a procedural statute, which means it focuses on the process agencies must follow rather than dictating the specific environmental outcomes. After a statute is passed, courts often elaborate on it based on how they interpret it, sometimes considering Congress's intent in passing it. In a 1976 Supreme Court case named Klepp v Sierra Club, the Supreme Court held that quote the only role for a court is to ensure that the agency has taken a hard look at environmental consequences end quote. And in a 2004 case named Department of Transportation v Public Citizen, the Supreme Court held that NEPA imposes only procedural requirements on federal agencies, with a particular focus on requiring agencies to undertake analysis of the environmental impact of their proposals and actions.
Speaker 1:Here's an analogy that helps explain these legal standards. Now think of the court as a sort of referee in a sports match. The referee ensures that players follow the rules and that the game is fair, but doesn't try to play the game or decide which team wins. In this case, the court's job is to ensure that the federal government followed NEPA's requirements and that it reached a rational decision, but it doesn't substitute its own judgment on whether congestion pricing is a good policy. This is an extremely important point and, with respect to this hard look requirement that came from one of the cases, you can view an agency's environmental review as a sort of health checkup. A hard look is a sort of comprehensive physical exam, not just a quick glance or a cursory check of vital signs.
Speaker 1:Now let's focus on the environmental assessment, that 958-page document in which the government determined that the plan would not have a significant environmental impact, making the need for a more expensive environmental impact statement unnecessary. Now, I painstakingly reviewed this report so you wouldn't have to and was impressed by many of its remarkably precise predictions. For example, it predicts that under one tolling scenario, traffic in the business district would fall by 15.4% and by 19.9% under another scenario. It also predicts that, across all tolling scenarios, between 16,000 to 42,000 fewer people would enter the district by car and that 72 to 82 percent of the total reductions in traffic would be from drivers finding ways around the tolls. As mentioned earlier, this report also projects that traffic and congestion will increase on Staten Island and the Bronx because of these diversions. How did the government make these predictions?
Speaker 1:To understand how we need to explore a crucial tool, the Metropolitan Transportation Council's best practice model, a traffic forecasting tool. It's considered the gold standard for analyzing large-scale transportation projects. Think of it as a weather forecasting system, but for traffic. Now, just as meteorologists use data on temperature, air pressure and wind patterns to predict weather. The model uses data to make its predictions. It starts with the 2010 census for baseline population information. Then it adds in what's known as real-world traffic counts, which are actual measurements of vehicles on the road, collected through methods like automated counters on streets and data from tolling systems. These counts tell us how many cars, trucks and buses are using specific roads at different times. The model also incorporates data on how many people use public transit and surveys that ask households about their travel habits. It also considers how population, jobs and other factors might change in the future.
Speaker 1:The model's representation of the road network is incredibly detailed. As you can see, imagine a giant digital map of the entire region. You know Connecticut, new Jersey, new York where every road is broken down into segments. Now these segments are what the model calls links. The model has over 61,000 of them in total, covering everything from your local neighborhood street to major highways like the I-95. Each of these road segments or links is packed with information. Each of these road segments or links is packed with information. The model knows, for example, how many lanes a road has, the speed limit it is, how many trucks use it and whether it has a toll. This model is like having a sort of miniature version of the entire region's transportation network inside of a computer where we can test different scenarios and see how traffic might change.
Speaker 1:Overall, the governments tested seven different tolling scenarios, seven ways of charging people. I'll explain just a few. Scenario A tolls all vehicles entering or remaining in the district, with high rates during peak hours. For example, a passenger car using E-ZPass might pay $9 during peak hours, but only $5 overnight. Scenario B adds caps on tolls for trucks and exempts buses. The peak toll rate would be around $10. So, for instance, a delivery truck might be charged twice per day at most at this rate, regardless of how many times it enters a district, while a city bus would pay no toll at all. And Scenario C offers crossing credits for vehicles using tunnels to access the district, along with some caps and exemptions. The peak toll rate would be approximately $14. So again, for example, a taxi might be completely exempt from this toll, while a four or higher vehicle like an Uber or Lyft would pay no more than three tolls per day at this rate.
Speaker 1:For each scenario this model, the forecasting tool simulates how 8.2 million households in the region make about 28.8 million trips on an average weekday. For each trip it predicts things like will the person drive or take the bus? Are they going to work or shopping? Person drive or take the bus? Are they going to work or shopping? Where exactly are they going? Will they make any stops along the way and what time will they travel? It's truly remarkable how much information this model has. It's almost as a panopticon, where it observes all of our actions, all of our moves. It's a bit creepy and we'll get to that in another episode, but for right now, as you can see, this model is complex, and that's because New York isn't simple. You know, a change in lower Manhattan can ripple out to New Jersey or the Bronx. So the traffic model helps planners understand these intricate relationships, simulating how people might make decisions about their travel.
Speaker 1:Government agencies rely on this traffic model for critical decisions. It's been used for the region's transportation plan, the redesign of the Port Authority bus terminal and even to ensure compliance with the Clean Air Act. In the case of congestion pricing, the Federal Highway Administration used the model to predict how traffic patterns might shift across the entire region under seven different tolling scenarios. But it's important to remember that this model isn't infallible, just like weather predictions aren't 100% perfect, just like weather predictions aren't 100% perfect. Despite these shortcomings, it seems to be the most comprehensive tool available, allowing planners to forecast changes in travel patterns and if people will shift from cars to public transit. Understanding this model is the key to grasping why the court puts so much stock in its predictions. It's not just a traffic counter. It's a powerful predictive tool that aims to capture the complexity of New York's transportation ecosystem.
Speaker 1:Now that we've covered the legal standard and the government's methodology, let's focus on a few of the plaintiffs, the challengers to the law, their challenges and how the judge dispensed with them. Now again, one way the plaintiffs challenged the plan is by arguing that the environmental assessment was fundamentally flawed because, at the time the government declared it wouldn't have a significant environmental impact, it had not settled on an exact tolling scenario. Yes, it tested seven scenarios, but it never settled on one. Given all these possibilities, the plaintiffs are asking how could the government know the consequences of this plan if drivers remain unaware of the actual cost? The judge overall disagreed. First, he acknowledged that the traffic modeling is imperfect, but that the government hedged against any uncertainty by modeling various scenarios seven of them, especially the ones that will result in the most negative effects.
Speaker 1:The worst case scenario varied depending on the element being assessed, but generally corresponded to tolling scenarios E and F, which had the highest toll amounts. You'll recall that all parties are worried that the tolls will divert traffic to their regions, increasing pollution and traffic, for example, for air quality and noise impacts outside of the business district. Particularly in areas where traffic might divert, the worst case scenario would be the one that caused the most traffic diversion. This typically aligned with the scenarios having higher toll rates, as they would naturally cause more drivers to seek alternative routes. For example, for the Bronx, five tolling scenarios showed increases in traffic, with scenario A having the most increase. For Staten Island, all scenarios projected would increase traffic, scenario G showing the largest increase. In terms of financial burden, the study found that Scenario E was the most expensive scenario for a round trip from the World Trade Center to Fordham University in the Bronx, increasing driver's expenses by 37.2%. Scenario E and F, for someone commuting from New Jersey to the Lincoln or Holland Tunnel would cost $23.65 each.
Speaker 1:Overall, the judge concluded that examining multiple scenarios allowed for a thorough and conservative analysis. He relied on precedent. That stands for the proposition that studying the effects of a project on the worst-case scenarios is a reasonable way to confront the uncertainty of a project. But the judge also made sure to mention that the final tolling structure cannot deviate too much from the exam scenarios without potentially requiring further review. Now, after reading this section, I sense the judge's ruling recognizes the complex and evolving nature of large-scale transportation projects. As such, he's allowing the agency some latitude in conducting its environmental review. They are the ones with the most knowledge and expertise, and the judge is simply ensuring that they've essentially done their homework.
Speaker 1:The next argument is that the federal government failed to adequately consider reasonable alternatives to the plan. Under NEPA, the environmental law, the government must consider alternatives and explain why it won't use them. The purpose of this is to learn whether a project's goals can be achieved through other policies rather than just taxing people. Now, during a study, the government surveyed 12 alternatives. It considered, for example, raising existing tolls on the Queens Midtown Tunnel and the Brooklyn Battery Tunnel. It reviewed establishing new tolls on bridges like the 59th Street Bridge and Williamsburg Bridge, and also considered mandating carpooling. It also considered reforming street parking to discourage people from driving into the area by raising the cost of parking. Under this alternative. It would have raised the rates of metered on-street parking, raised taxes on parking throughout the district and introduced an overnight on-street parking fee parking fee. The government, however, rejected those alternatives because they either didn't raise enough revenue or wouldn't lead to a meaningful reduction in traffic. It found that implementing tolls on these certain bridges would not raise enough revenue and that reforming street parking was projected to only reduce the number of miles driven by cars by less than 1%, which falls short of the project's 5% reduction goals.
Speaker 1:All that being said, here's what's important. The court emphasized that revenue goals played a crucial role in the government's decision-making process. You'll remember from earlier that the Traffic Mobility Act mandated that the project generate at least $15 billion. If an alternative didn't generate enough money, the government could reject it by its law. The judge's legal reasoning centered on the principles that agencies have discretion in considering alternatives as long as they follow a rule of reason, and that rule of reason here seems to be that the state needs to generate revenue for public transit. Now, by deferring to the government, the judge is in many ways adhering to this principled concept of separation of powers, which holds that each branch of government serves a particular function.
Speaker 1:Now let's move on to the Battery Park City plaintiffs, who argue that they were ignored. For this part, I have to explain Battery Park City's location briefly. This neighborhood is located on the southwestern tip of Manhattan and is bounded by the Hudson River to the west and the West Side Highway to the east. In its study, the Highway Administration identified 102 intersections that were most likely to experience traffic increases. For each intersection, the traffic model estimated how much carbon monoxide and particulate matter, two major air pollutants from vehicle exhaust, might increase under the worst case tolling scenario. It did this by considering factors like how many more vehicles might use each intersection, how long they might idle there and what type of vehicles they might be, for example cars versus trucks. Of those 102 intersections, five were located along the West Side Street bordering Battery Park City. The Highway Administration then measured these increases in CO2 and particulate matter against pollution standards set by the New York State Department of Transportation and ultimately determined that all the projected increases wouldn't exceed the department's safety limits. So in response to the argument that the study neglected Battery Park City, the judge didn't agree. Here the judge mentioned that the traffic modeling tool was credible and that the government's review of the region of the city was exactly the type of hard look the law requires of government agencies.
Speaker 1:Before I explain the next section, I need a moment to define this concept known as environmental justice. Environmental justice is a principle that aims to ensure the fair treatment and meaningful involvement of all people, regardless of race, color, national origin, etc. In the development of environmental laws. It aims to move beyond the days when whole communities were excluded from urban planning. A great book about this is the Power Broker, about Robert Moses. In the context of big infrastructure projects, it means ensuring that already vulnerable communities don't shoulder an unfair share of negative impacts or miss out on the benefits.
Speaker 1:Recall that all the opponents, the plaintiffs, argue that throughout the study period, the Highway Administration didn't adequately study how this plan would affect economically vulnerable communities, which are communities that are predominantly minority and low-income. In fact, after the Highway Administration published its draft environmental report, the EPA, the Environmental Protection Agency raised concerns that the environmental justice communities were not properly assessed. Now, in response, the Highway Administration conducted an additional technical study and appended the results to the Final Environmental Assessment, the EA. That appendix indeed found that certain areas would in fact experience higher traffic, resulting in lower air quality. These areas include, as I mentioned earlier, staten Island and the Bronx, as well as parts of Brooklyn and a section of Upper Manhattan, aka Harlem. Despite these findings, the Highway Administration nonetheless still concluded that the plan would not have a significant environmental impact, given New York State and the city the approval to implement the plan.
Speaker 1:Now, concluding that the plan wouldn't have a significant environmental impact doesn't mean that it wouldn't deteriorate these areas, at least marginally. In fact, it would. Now you might be wondering about all those individuals who, legitimately, will be affected by the plan. You know, you remember the asthmatic music teacher from the Lower East Side, or the elderly man whose wife suffers from chronic health issues. What will happen to them? Will they be left to fend for themselves? Well, the government says no.
Speaker 1:To mitigate the plan's negative effects, the government proposed several options, most notably committing $155 million over five years to mitigate any problems that emerge from the plan and to monitor any changes in these areas that may require more investment. These mitigation measures are very important and they entail improving the air quality in these areas. Improving the air quality in these areas. Now, in more detail, the state proposes to reduce overnight tolls to discourage trucks from diverting through these areas, which means there'll be less pollution. It also is offering subsidies to trucking companies to incentivize them to convert their trucks, their fleet, to electric vehicles. It also proposed building electric truck charging stations throughout the city to ease the use of electric vehicles. It also proposed installing air filtration systems in schools, near busy roads, where traffic will increase. And it also plans to mitigate all this by planting thousands of more trees which are scientifically known to capture carbon. It planting thousands of more trees which are scientifically known to capture carbon. It also proposed several other measures, but I'll leave it there. Essentially, the government plans to reduce the aggregate amount of carbon and particulate matter throughout the city. Now, legally, under NEPA, courts in this district, which is New York, technically known as a second district area district in this area have held that a government's commitments to attenuate the negative effects of a plan, as well as closely monitoring the areas for continued improvement, are in compliance with the law. Okay, so those are the mitigation measures for pollution.
Speaker 1:What about financially, especially for those with low income? Here the plan says that for the first five years it will discount 25% of the toll for the applicable time of day after the first 10 trips for drivers with a federal adjusted gross income of less than $50,000. I'm smiling because that was a mouthful and a bit difficult to explain, and I'm sure it may have gone over your head, but the city is essentially proposing a reduction in the tolls for people who earn less than $50,000. In addition, the plan will also include a tax credit for tolls paid by residents of the business district whose adjusted gross income is less than $60,000. For drivers of taxis and for hire vehicles like Uber, all of whom raised concerns during the study period, the plan promises not to toll these drivers more than once per day.
Speaker 1:In whatever tolling scenario the state ultimately chooses, if congestion pricing will reduce traffic, improve the air quality and increase the reliability of the subway system, why is there such recalcitrance against it? Assuming that the majority is against it? Assuming that the majority is against it. In my opinion, this opposition comes from the fact that we don't realize the cost of the status quo. The state and the city need to do a better job explaining this, and perhaps they have, but more in detail, according to a report.
Speaker 1:According to a 2006 report by the Partnership of New York City, delays endured by commuters, workers and other travelers annually cost between $5 to $6.5 billion in lost time and productivity and an estimated $2 billion in wasted fuel and other vehicle operating costs. Congestion also affects the cost of doing business and the cost of living in the tri-state region. This report found that traffic delays add to logistical, inventory and personnel costs that annually amount to an estimated $1.9 billion in additional business costs. Estimated $1.9 billion in additional business cost. This report was released nearly two decades ago, when traffic was less severe. The cost of doing nothing is already expensive. We all agree that this toll is annoying as hell, but if we look at the hidden cost, have we considered how much time we're losing stuck in traffic? Now? That's time you could spend with your family or earning money elsewhere. Have we also thought about all that stop and go driving? That's burning extra gas and also wearing out our cars faster, increasing our maintenance costs. How much is this costing all of us to maintain our cars? Now the state has to reveal these hidden costs of doing nothing.
Speaker 1:The additional hidden cost, which, in my opinion, is the more scandalous one, is that the state has already expended tremendous resources preparing for the program. Since 2019, it's reported that about 600 people have worked on this project, with some employees having spent the past four years on the environmental assessment. Overall, this assessment and all that work produced a 958-page report and an administrative record of more than 45,000 pages. Lots of trees have been destroyed. The MTA also entered into a $556 million contract a half a billion dollar contract for cameras, software and other tools necessary to execute the plan. An article in the Wall Street Journal estimates that the estimated total loss of abandoning the plan will be roughly $700 million. Now the environmental assessment is very clear about these sunk costs On page 800-something it says. That quote the implementation of the congestion pricing program would result in the permanent commitment of natural, physical and human resources that cannot be recovered after completing the project. This is perhaps, in my opinion, the most significant reason why I think this program will eventually be implemented. If it isn't implemented, it perhaps will be the most catastrophic, the most severe example of profligacy and money wasting by our government.
Speaker 1:The second reason why people seem apprehensive is, unfortunately, because the MTA has a checkered history of mismanagement and poor spending decisions. This is perhaps the main reason why New Yorkers perceive this plan as just another way to yank money away from us. The MTA has a well-documented history of inefficient spending on major projects. Inefficient spending on major projects. One example is the East Side Access Project, which connected the Long Island Railroad to Grand Central Terminal and ended up costing $16.6 billion, supposedly seven times the average cost for similar projects elsewhere in the world. For this one project, the engineering contract was initially set for $140 million but then metastasized to $481 million. Another example is the Second Avenue subway extension, which apparently cost $2.5 billion per mile, making it the most expensive subway project in history. Now the reasons for these inflated costs are multifaceted and detailed in a remarkable expose by the New York Times titled the Most Expensive Mile of Subway Track on Earth. Now let me just say the MTA does not have an easy job. Managing the most congested, most populous city perhaps in the world isn't simple and mistakes are inevitable. But it's important that we point this out because it's one reason why people are apprehensive to being charged through this plan.
Speaker 1:This article by the New York Times highlights many of the inefficiencies and problems with subway construction. For instance, an accountant who reviewed the East Side project's budget could not account for what 200 workers were doing for a span of time on the project, leading to the conclusion that the workers were being paid to do nothing. Their pay for a day, $1,000. In other words, if this inference is correct, if it's reasonable, for an unspecified amount of time the MTA dished out $200,000 for nobody knows what. How does this happen? Are the state and the MTA poor negotiators? Apparently, the truth is worse. According to this piece, the MTA supposedly doesn't even negotiate with the construction companies and labor unions when they negotiate the terms of a project. Now, I don't know if this has changed since this piece was published in 2017, but the fact that the MTA doesn't grab a seat at the negotiating table yet still pays the bill seems foolish to me.
Speaker 1:Considering the magnitude and expense of these projects, how is it that the MTA isn't involved? Regarding the inflated cost, the article mentions that projects are often overstaffed. One example is that generators and elevators must each have human operators, even though they're automatic. Another example is that a dedicated person must staff break rooms. These terms may be a function of the lack of competition for MTA contracts. The article, for instance, found that the average amount of bids received for 150 contracts signed by the MTA between 2012 and 2017 was just 3.5, not that much. Another egregious practice is that vendors, on top of their normal fee, charge the MTA a so-called MTA factor fee, which is described as a fee that compensates them for dealing with the inefficiency of the MTA.
Speaker 1:Now, I'll admit, of course, that my knowledge of infrastructure projects is extremely limited. I'm practically ignorant, if I'm being honest, and it's limited to what I've read, which isn't rooted in much actual experience. I'm also not saying that unionized construction workers shouldn't be paid for their hard work. Getting dirty while digging tunnels and working around loud and dangerous machinery is far different, and, I will say, harder, than a swanky office job or a work-from-home situation. You won't find many people objecting to this, many people objecting to this.
Speaker 1:But if the state is justifying this ambitious congestion pricing plan on the basis that it needs $15 billion to improve the subway, it better deliver. It needs to find a way to ensure projects don't inflate unreasonably. You always have to account for prices increasing. That's fine, but they have to be reasonable. The MTA it needs to become more efficient, removing the justification for that outrageous so-called MTA factor fee charged by vendors. And perhaps, and most importantly, it should grab a seat at the negotiation table, because if the state doesn't deliver, what will happen is that it will come back to New Yorkers for more money, which will ultimately compromise its legitimacy.