One Cheer for Congestion Pricing
by Sandy Ikeda
Fri, 4 Apr 2008
Earlier this week the New York City Council voted for congestion pricing. You can get the story here and here.
From 6 a.m. to 6 p.m. on weekdays you will now have to pay $8 ($9 if you don't have EZ Pass) to drive your car (or $21 if you drive a truck) below 60th Street or to cross any of the downtown bridges, as well as a surcharge if you're driving through the Lincoln or Holland Tunnels from New Jersey.
An article in the Daily News is better on the details: Parking meter rates in the zone also would rise, though the amount has not been set, with the proceeds earmarked for projects to help pedestrians and bicyclists. Manhattan residents in the zone also would lose their exemption from part of the 18.375% tax on parking garages.
Drivers who take those bridges would have to pay the $8 congestion fee when they reach Manhattan, even if they're just passing through on their way to somewhere else. (One of my earliest posts examined some unintended consequences of congestion pricing.)
Now, it's unlikely that Mayor Bloomberg and Speaker Christine C. Quinn would have put the program up for a vote before the Council unless they believed there were enough votes in the State Assembly to pass the measure by April 7, the deadline for getting some $350 million in federal funds. So it looks like a done deal.
I'm all for using the price mechanism to ration scarce goods. As I've said before, however, calling this a congestion "price" is a bit of a misnomer – the proposed $8 toll, like bridge and tunnel tolls, is arbitrary and not a market price. (I don't know how the $8 figure was arrived at – Londoners must pay ?8 to enter Zone 1, but that's around $16. Is street space twice as scarce there than here?) Market prices go up AND down in response to changes in demand and supply. Even New York real-estate prices go down sometimes. It's unlikely that this politically determined congestion price will do anything but go up. One thing's for certain, it's never, ever going away.
Some kind of a "cap-and-trade" approach, though not practicable right now, would come closer to genuine pricing. For example, the government decides on the absolute number of trips into the congestion zone that it wants in Lower Manhattan at any given time (which I know itself poses lots of problems) and then auctions them off each day on its congestion pricing website. Bids and offers would determine a daily spot price. Or you could purchase, say, the right to make 30 trips per month: You either agree to pay the spot price when you drive in or the right to that trip goes back into the pool of available trips that day. Everyone who want to drive into Lower Manhattan may have to have an E-Z pass, not a big problem, as well as access to a computer terminal, which could be a problem. In the meantime, though, we have the more clunky but workable $8 toll, which is a second-best at best.
I'm also concerned about what happens to the toll revenues. According to the Environmental Defense Fund website, About $500 million in annual revenue will be invested in transit expansion. This will reduce the $30 billion backlog in capital investment needed for major projects — for example, a Second Avenue subway line, and bus service in neighborhoods that lack transit options. Anything over that amount would then seem to be fair game for rent seekers. Earlier discussions mentioned placing all revenues in a proverbial "lock box" from which only spending for mass transit could be made. See here, for example. I haven't heard whether Bloomberg et al. want this. But even if the MTA controls all ear-marked revenues, there's still the question of how it would be spent.
I close with a passage from the blog of Henry J. Stern, long-time denizen of New York policy matters, who puts it well: Now if the MTA spent sensibly, it might be more deserving of being subsidized by drivers who dare to enter Manhattan. But an agency which threw $450 million into rearranging the South Ferry station, and a billion or more on a Fulton Street track switch which is far from completion, and whose sister agency, the Port Authority, is wasting several billion on a Calatrava-designed station for the Path line at the former World Trade Center, although a new station at that site has already been built for $322 million, is hardly a place on which to bestow additional hundreds of millions of dollars extracted for taxpayers who wish to enter the golden isle.
The forty-billion dollar expansion plan outlined by the MTA shows its infinite, insatiable desire for more public funds. Never stop building, look at the Pharoahs [sic]. So, while congestion pricing hopefully unclogs our streets in Lower Manhattan (which somehow now encompasses all of Midtown), it also gives our politicos a vast, untapped source of mud and straw with which to build ever more ostentatious monuments to their greatness.
Culture of Congestion Homepage
|
Print
Send
RSS
