New York governor pushes for tax increase after nixing toll program in Manhattan
ALBANY, N.Y. — On Wednesday, Gov. Kathy Hochul angered environmentalists and transit advocates — but delighted suburban commuters — by putting the brakes on a plan to combat traffic in New York City by imposing high tolls on Manhattan motorists.
On Thursday, she tried to drum up support for her proposal to raise a business tax to replace the $1 billion a year tolls for New York’s ailing subway system.
The governor’s behind-the-scenes effort to get legislative approval for the tax hike came a day after she unexpectedly increased “congestion pricing” tolls, a program that had been in the works for years and was scheduled to end June 30. would start.
The Legislature, which is expected to wrap up its annual term Friday, would have to approve the tax increase on city businesses, known as a wage mobility tax.
It didn’t seem to have much support.
“To tell New Yorkers you care about the cost of living and then propose an increase in their taxes is incomprehensible to me. It doesn’t make sense,” said Sen. Zellnor Myrie, a Democrat.
Avi Small, a spokesman for Hochul, declined to provide details Thursday about the governor’s proposed tax increase and instead referred a reporter to comments Hochul made a day earlier in a pre-recorded video announcing the indefinite pause on congestion pricing .
“We have set aside funding to support the MTA capital plan, and are currently exploring other sources of funding,” Hochul said Wednesday, referring to the Metropolitan Transportation Authority, the entity that controls the subway, bus and commuter rail systems that serve the city.
Congestion pricing was signed into law by former Governor Andrew Cuomo in 2019, after years of advocacy by public transit advocates.
In her pre-recorded statement, the governor said she was blocking the plan because of the financial burden on residents dealing with inflation and high costs of living. She also mentioned the city’s fragile economic position, which continues to recover from the COVID-19 pandemic.
Drivers entering Manhattan south of 60th Street would have to pay a toll of about $15, depending on vehicle type, in addition to the toll for entering the same area via certain bridges and tunnels.
Sen. Liz Krueger, a Democrat who chairs a legislative finance committee, noted that the proposed business tax would ultimately be passed on to workers and said she doesn’t think her chamber would support such a proposal.
“Don’t forget that wage mobility taxes are actually taxes on employees. It is not a corporate tax, it is a tax on employees,” Kruger said, adding, “I believe the governor has misjudged this.”
New York City’s Independent Budget Office said the tolls were expected to generate $400 million this year and $1 billion annually thereafter. The toll revenue would fund $15 billion in capital projects for the Metropolitan Transportation Authority, which operates a vast transportation network in the city and across much of the state.
The MTA has already allocated more than $400 million for infrastructure to implement congestion pricing, according to the budget office, and has a contract worth more than $500 million with a private vendor charged with operating and maintaining the toll infrastructure.
Before the abrupt reversal, Hochul was a staunch supporter of congestion pricing and had touted the program just two weeks ago. As the start date approached, opposition began to mount, with harsh criticism from the city’s suburban commuters.