NY congestion pricing judge blames scheme on New Jersey impact

(Bloomberg) — A federal judge struck down New York’s plan to charge drivers entering Manhattan’s central business district over its effects on neighboring New Jersey, striking down a congestion pricing program days before it took effect. May create a new obstacle.

Judge Leo M. Gordon issued a mixed ruling Monday, dismissing some of the concerns raised by New Jersey but also determining that federal transportation officials must provide more explanation about its decision-making.

The goal of the program is to help the Metropolitan Transportation Authority raise $15 billion to modernize its transit system. It will charge most drivers entering Manhattan at or below 60th Street a $9 fee. It was designed to reduce traffic and pollution while also raising funds for the city’s subways, buses, and commuter rail.

The decision adds to the uproar over the plan, which was scheduled to launch on June 30, before New York Governor Kathy Hochul postponed it indefinitely, only to announce that she would extend it to $15. Instead of starting again with a toll of $9.

MTA head Janno Lieber said the judge’s ruling would not interfere with the program’s scheduled Jan. 5 start date.

“We are pleased that Judge Gordon agreed with the New York federal court on nearly every issue and rejected New Jersey’s claim that the environmental assessment approved 18 months ago was inadequate,” he said in a statement.

Representatives for the federal Transportation Department did not immediately respond to a request for comment. Representatives for New Jersey Governor Phil Murphy also did not immediately respond to a request for comment.

New Jersey called the scheme a “shameless money grab.” The state challenged the federal government’s conclusion that it would have no significant impact on the environment and sued to force the Federal Highway Administration, which had approved the project, to conduct a comprehensive review.

The Department of Transportation is required to review the environmental impact of any major project funded by the federal government, such as congestion pricing tolls. The agency concluded that the plan’s impacts could be minimized. But parties who may be affected by the project can seek a comprehensive review, called an environmental impact statement, which is more detailed and rigorous.

Gordon found that the environmental assessments “fail to provide a logical connection” between the mitigation plans and how they resolve any environmental harm in New York or New Jersey.

The judge ordered the plan to be sent back to the Federal Highway Agency to better explain the connection, and if necessary to reconsider whether it would cause varying degrees of harm to the Bronx and certain areas of New Jersey. need to be reduced.

The decision does not directly address whether the plan can proceed on its planned start date, but the judge set a deadline for the parties to file additional information on the mitigation plans in February.

President-elect Donald Trump, who is scheduled to take office on Jan. 20, has called the program a “massive business killer and tax on New Yorkers.”

Legal challenges to congestion pricing were also filed in New York, where two other federal judges declined to block it. Those lawsuits involved groups representing various city residents, workers and business owners. Unsuccessful bids were also brought by Rockland and Orange counties to block the program.

Separately, the city of Hempstead filed suit in state court, alleging that Hochul’s decision to restart the program was an illegal effort to advance it before Trump took office. A judge has scheduled a hearing on that case for Jan. 16.

Because of litigation risks, the MTA was planning to invest only $2.9 billion in capital projects this year, a sharp decline from the $12 billion it would otherwise undertake. Its victory over New Jersey could help get those upgrades back on track — if the plan survives Trump’s opposition.

The case is New Jersey v. U.S. Department of Transportation, 23-cv-3885, U.S. District Court, District of New Jersey (Newark).

–With assistance from Michelle Kaske and Bob Van Vorhis.

(Update with comment from the MTA chief begins in the fifth paragraph.)

More stories like this are available on Bloomberg.com