The U.S. Department of Transportation (DOT) issued a letter ordering New York City’s Metropolitan Transportation Authority (MTA) to eliminate its controversial congestion pricing tolls by mid-March.
The letter, dated and signed by Federal Highway Administration (FHWA) Executive Director Gloria Shepherd on Feb. 20 and released Wednesday, notes that the New York State Department of Transportation (NYSDOT) and its project sponsors “must cease” the collection of tolls on Federal-aid highways in New York’s Central Business District Tolling Program by March 21.
It noted the program’s implementation was initially approved by the FHWA prior to DOT Secretary Sean Duffy sending a letter on Feb. 19 terminating the program.
Shepherd called for agencies and project sponsors to “terminate operations” in an “orderly manner,” according to the letter.
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Last week, the Trump administration issued a federal order halting the program, which began Jan. 5 and aimed to limit traffic and fund mass transit by adding a $9 toll on “most” vehicles entering Manhattan’s core south of Central Park.
Despite Trump’s action, the tolls have continued due to a federal lawsuit filed by the MTA, a state agency that runs public transit in New York City.
“Our position is clear: this is not a lawful order. We have already filed a lawsuit and now it’s up to the courts to decide,” John J. McCarthy, MTA chief of policy and external relations, wrote in a statement on Wednesday.
Critics say the tolling negatively impacts suburban commuters or those without access to the subway system, causing increased costs for working-class Americans and small business owners. The “cordon pricing” method of tolling means drivers are required to pay a toll regardless of which roads they use, as there are no toll-free options.
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Advocates argue the fees will limit traffic congestion and reduce air pollution.
The MTA on Monday announced tolls from the Congestion Relief Zone (CRZ) generated $48.66 million in revenue, with a net of $37.5 million, from Jan. 5 to Jan. 31.
The figures show the program is on track to generate the $500 million that the MTA initially projected.
“We are on track for the projected $500 million in net revenue, especially as we get into warmer months when traffic will increase which provides confidence in the forecast,” said MTA co-chief financial officer Jai Patel. “All indicators show the program is reducing traffic but also projecting the revenue to be on target for what we had in 4,000 pages of studies and what we were looking at in the fall.”
Of the nearly $50 million generated from the program’s start in January, 22% came from taxis and for-hire vehicles ($10.6 million), 68% came from passenger vehicles, 9% came from trucks, and 1% came from buses and motorcycles, according to the MTA.
About 85% of non-taxi and for-hire vehicles revenue was generated from passenger vehicles, and 15% was generated from trucks, buses, and motorcycles, the agency reported. And 95% of revenue was generated during peaking tolling hours.
Expenses from the program, which include operating camera infrastructure and customer service, amounted to $9.1 million. Factoring in another $2 million for mitigation efforts, the results were a net surplus of $37.5 million.
New York Gov. Kathy Hochul, a proponent of the program, met with Trump to discuss the issue.
The Democrat claimed the city is “paralyzed with gridlock,” and the program could “make the city move again.”
“The people in my state need to know I’m willing to take the fight wherever I have to,” Hochul said.
As the situation unfolds, Hochul said she expects the state’s case to be won in court and the program will continue.
The Federal Highway Administration and NYSDOT entered into an agreement on Nov. 21, 2024, approving the Central Business District Tolling Program (CBDTP) under the Value Pricing Pilot Program (VPPP).
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The VPPP, which was approved by Congress in 1991, is an exception to the general rule outlawing tolling on highways as a pilot to test congestion reduction techniques.
New York is one of about a dozen states allowed to implement the program.
Fox News Digital’s Danielle Wallace, Charles Creitz and Stephen Sorace contributed to this report.
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