New York state budget calls for 'congestion pricing' to support MTA

New York state lawmakers early this week approved a fiscal-year 2020 state budget plan that calls for Metropolitan Transportation Authority (MTA) reforms, and includes a "congestion pricing" program that would provide a new source of revenue to the transit agency.

Under congestion pricing, motorists will be charged a toll entering the city's most congested streets. The goal of the charge is to help reduce traffic congestion, while generating revenue for MTA.

The budget will reform and fund the MTA with an estimated $15 billion to be raised through central business district tolling, according to a press release issued by Gov. Andrew Cuomo's office.

According to the governor's office, the budget requires MTA to develop a reorganization plan by June; modifies MTA board appointments to align with appointing authority; requires the agency to undergo an independent forensic audit and efficiency review; calls for a construction review unit of outside experts to review major projects; implements a 20-year capital needs assessment beginning in 2023; increases the competitive procurement threshold from $100,00 to $1 million; establishes a 30-day review notice for comptroller contact approval; and requires public reporting on MTA performance metrics.

Additionally, the budget requires any MTA capital project over $25 million to use the design-build process.

As for MTA funding, the budget's central business district tolling program — also known as congestion pricing — electronic tolling devices will be installed in the district, defined as streets south of 60th in Manhattan. Passenger vehicles will be charged once per day. Implementation will not begin before Dec. 31, 2020.

New York City would be the first major city to implement congestion pricing.

The new state budget also creates a "dedicated lockbox" to ensure that 100 percent of the congestion pricing revenue gores to the MTA capital budget.

In addition, the budget calls for:
• implementing a "progressive mansion tax" with a combined top rate of 4.15 percent on the sale of residential properties valued at $25 million or above in New York City. The tax is expected to raise $365 million from high-end property transfers that will be deposited into the MTA's central business district tolling capital lockbox and used to support up to $5 billion in financing for MTA projects. The mansion tax takes effect July 1.
• eliminating the internet tax advantage, which calls for collection of required sales taxes on internet marketplace providers. The collection is expected to generate $320 million for the MTA capital plan lockbox, supporting up to $5 billion in MTA financing.

Moreover, the new state budget will invest an additional $150 billion in the state's infrastructure program over the next five years, including transportation projects.