Federal Reversal of New York’s Congestion Pricing Program: Impacts on Traffic and Transit Funding

Person speaking at podium with presidential seal.

The Trump administration has overturned federal approval for New York’s congestion pricing program, sparking a fierce debate over traffic management and transit funding.

Key Insights

The Trump administration revoked federal approval for New York City’s congestion pricing program, citing jurisdictional concerns and unfair burden on motorists.
Transportation Secretary Sean Duffy argued the program didn’t qualify for federal tolling exemption due to lack of toll-free options and focus on transit funding over congestion reduction.
New York Governor Kathy Hochul vowed to sue over the cancellation, while the MTA has already initiated legal action against the Trump administration.
Studies predicted minimal impact on congestion reduction, raising questions about the program’s effectiveness in achieving its stated goals.
The situation highlights the complex relationship between state initiatives and federal transportation policies.

Trump Administration Halts New York’s Congestion Pricing

In a significant move, the Trump administration has terminated federal approval for New York City’s congestion pricing program. The decision, announced by Transportation Secretary Sean Duffy, effectively halts the implementation of tolls on drivers entering lower Manhattan. Duffy stated that the federal government has jurisdiction over highways leading to Manhattan and argued that the tolls would unfairly burden motorists from outside the city.

The congestion pricing system, which required most vehicles entering Manhattan’s central business district to pay a peak fee, was initially authorized in 2019. Its primary objectives were to reduce traffic congestion in the densely populated area and generate funds for public transportation improvements. However, the program faced numerous delays due to practical and political challenges, including the need for federal exemption and an environmental study under NEPA.

“CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!" Trump said.

Read more: https://t.co/MUwGDlqKhk

— unusual_whales (@unusual_whales) February 19, 2025

Controversial Decision Sparks Debate

The federal reversal has ignited a heated debate among officials, with President Donald Trump celebrating the decision on social media. Trump’s declaration of victory for New York and his self-proclamation as “king” drew sharp criticism from New York Governor Kathy Hochul.

“CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!” – President Donald Trump

Hochul responded forcefully, asserting that New York will not be ruled by a “king” and vowing to challenge the decision in court. The Metropolitan Transportation Authority (MTA) has already initiated legal action against the Trump administration, highlighting the benefits of congestion pricing for the city’s transportation system.

The U.S. Department of Transportation's Federal Highway Administration will revoke approval of NYC's program. https://t.co/gpfDg6P1TQ

— Newsweek (@Newsweek) February 19, 2025

Effectiveness and Revenue Generation Concerns

Critics of the congestion pricing program have pointed out its predicted minimal effect on reducing traffic. Studies suggested that the impact on congestion would be muted due to lower tolls for taxis and for-hire vehicles, as well as discounted tolls outside peak hours. Preliminary data showed reduced congestion on bridges and tunnels but not within the priced cordon area.

“We tried gridlock for 60 years. It didn’t work, It cost our economy billions. But you know what’s helping our economy? What’s making New York a better place? Congestion pricing.” – Janno Lieber

The Trump administration’s reasoning for cancellation aligns with critics who argue that the tolls were set to maximize revenue rather than reduce congestion. This emphasis on revenue generation for transit over traffic reduction was cited as a key factor in the federal decision to revoke approval.

Implications and Future Outlook

The federal reversal of New York’s congestion pricing program underscores the significant influence of federal authorities over state and local transportation policies. It raises questions about the balance between local initiatives and federal oversight in addressing urban congestion and transit funding challenges.

As New York officials prepare to challenge the decision in court, the outcome of this confrontation could have far-reaching implications for future congestion management strategies in major cities across the United States. The situation highlights the need for clearer guidelines and potentially congressional action to address the complexities of implementing innovative transportation solutions within the framework of federal regulations.