President Donald Trump clawed back federal support for New York City’s controversial congestion pricing toll program, driving the city’s funding agenda for its mass transit system into doubt.
As Kiplinger reported, the program was implemented last month and charges commuters a new toll of $9 to enter Manhattan’s Central Business District south of 60th Street. Overall, it was projected to provide $15 billion in funding for the city’s transit system and alleviate congestion.
The U.S. Department of Transportation withdrew its approval for the program on Feb. 19, informing NY Gov. Kathy Hochul of the decision in a letter penned by the newly minted DOT Secretary Sean Duffy.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In the released statement, Duffy characterized the congestion program as a “slap in the face to working-class Americans and small business owners” as the daily tolls place an additional financial burden on commuters.
“I do not believe that this is a fair deal,” added Duffy.
The congestion pricing program was approved in November under the Biden administration. It kicked off on Jan. 5, 2025, despite facing opposition and multiple lawsuits—including one from neighboring New Jersey Gov. Phil Murphy.
Trump boasted about his decision to roll back the toll in a Truth Social post.
“CONGESTION PRICING IS DEAD," wrote President Trump. "Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!”
In response, Hochul released a statement. indicating that New York's Metropolitan Transit System (MTA) was prepared to contest his decision.
“We are a nation of laws, not ruled by a king. The MTA has initiated legal proceedings in the Southern District of New York to preserve this critical program," Hochul said. "We’ll see you in court.”
The dispute is raising questions not just about congestion pricing but also about federal intervention in state affairs. What does this mean for commuters into NYC?
New York's congestion pricing goes to court
New York’s MTA chair and CEO Janno Lieber said the agency filed legal proceedings in federal court in response to DOT’s letter.
Lieber noted that the program has so far “dramatically reduced congestion” and that it would continue notwithstanding the federal government’s “baseless effort” to roll back the benefits from mass transit users in Manhattan’s lower district.
“It’s mystifying that after four years and 4,000 pages of federally-supervised environmental review and barely three months after giving final approval to the Congestion Relief Program - USDOT would seek to reverse course,” Lieber said in a press statement.
It is important to note that the Trump administration's intervention is igniting debate about states' rights and federal overreach.
One argument is that the federal government can't control a state-managed traffic system and that doing so infringes on state sovereignty. That concern will likely be central to upcoming legal challenges.
Is congestion pricing working?
Although congestion pricing was enacted in early January, early data revealed that congestion levels have lowered. Some drivers have been entering the congestion zone before 5 a.m., to avoid the peak period toll of $9.
- About 2,300 vehicles entered the city during each 10-minute window from 4:40 a.m. to 5:00 a.m.
- That volume dropped to about 1,800 vehicles from 5:00 a.m. to 5:20 a.m.
As reported by Kiplinger, those commuting during MTA’s peak hours (5 a.m. to 9 p.m. on weekdays and 9 a.m. to 9 p.m. on weekends) face higher tolls.
Meanwhile, overnight tolls are 75% cheaper. Those tolls can be as low as $2.25 for normal commuters. Likewise, motorcyclists are charged $6.75 during peak hours and $1.65 overnight.
What’s next for congestion pricing in NYC
Whether the congestion pricing toll program will stick remains to be seen with the Trump administration’s latest push to end the tax.
While congestion pricing would reduce the gridlock in downtown Manhattan, funds drawn from the tolls were slated to expand bus service to outer borough residents, invest in the Long Island Rail Road (LIRR), and improve elevator service for seniors and folks with disabilities.
It also aimed to extend the Second Avenue Subway and build an Interborough express between Brooklyn and Queens.
Without congestion pricing in place, New Yorkers could face higher taxes. The revenue to support the MTA’s improvements has to come from somewhere, and state lawmakers have already cited concerns that congestion pricing wouldn’t be enough.
Stay tuned as this is a developing story that may impact your daily commute in New York.
Related Content:
- More Taxes Could Slam New Yorkers Over MTA Budget Shortfall
- NYC Congestion Pricing: ‘Ghost Tax’ or Necessary Fee?
- 10 States With The Lowest Gas Tax
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
Another Capital Gains Tax Ban Just Passed: Could Other States Follow?Capital Gains A constitutional amendment blocking future taxes on realized and unrealized capital could raise interesting questions for other states.
-
Emergency Tax Bill Ends $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.Tax Law Here’s how state tax conformity rules could immediately raise your income tax liability.
-
New RMD Rules: Can You Pass This Retirement Distributions Tax Quiz?Quiz Take our RMD quiz to test your retirement tax knowledge. Learn about RMD rules, IRS deadlines, and tax penalties that could shrink your savings.
-
Ten Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs, and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
-
The Original Property Tax Hack: Avoiding The ‘Window Tax’Property Taxes Here’s how homeowners can challenge their home assessment and potentially reduce their property taxes — with a little lesson from history.
-
Social Security Tax Limit Rises Again: Who Pays More in 2026?Payroll Taxes The Social Security Administration has announced significant changes affecting millions as we approach a new year.
