CITY CONGESTION EXTRA FEES

Congestion pricing, the concept of charging more during periods or lanes of greater demand in an effort to maximize profits, has been around for many years. For example- compare prices to book a flight during the Thanksgiving season as opposed to the beginning of November. This allows companies to control activities in certain areas of particularly higher demand and provides an incentive to move more activity to off-peak times.

In NYC, Governor Cuomo’s Fix NYC panel submitted a proposal for vehicles driving in Manhattan below 60th Street to be subject to a charge: $25.34 for trucks, $11.52 for cars, and between $2-$5 for taxis and other for-hire vehicles. The money collected from the endeavor would go to funding repairs to the city’s ailing public transit system, while also easing the record traffic in Manhattan. The plan defines a geographic “pricing zone” and recommends the installation of technology to monitor traffic and charge vehicles electronically.

The central business district for Manhattan is bounded by 60th street on the North, Battery Park on the south, and Hudson River and the East River. Under the panel’s plan, automobiles entering between 6am and 8pm on work days would pay additional fees.

The proposed plan would raise revenue of $810 million and reduce traffic into the zone 13%, according to the panel. It also would help increase average vehicle speeds by 9%.

Cuomo, second-term Democrat, created the panel in October and asked it to devise congestion-reducing proposals for this year’s legislative session. Mayor Bill de Blasio, a Democrat who has long feuded with the governor, opposes congestion pricing and calls it a “regressive tax”. In April 2008, the state Assembly rejected then-Mayor Michael Bloomberg’s proposal to charge cars $8 and trucks $21 upon entering the most congested parts of Manhattan, which he said would reduce the pollution and raise close to $500 million. The new proposal, should it become legislation, is likely to look very different from what it is now due to the political climate surrounding it.

New York City has always been a difficult destination to ship to or from- with charges for freight shipments averaging 20%-40% more than a regular shipment outside of this area. The high cost of moving freight into and out of NYC will only increase with this legislation, possibly deterring many manufacturers and retailers out of the city or out of business. However, it is clear that the city has a real congestion issue that needs to be addressed with revenue that should be pumped into the disintegrating public transit system.

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