NY traffic plan wins $354m federal aid

By Christopher Grimes in New York

August 14, 2007

http://www.ft.com/cms/s/01549fe2-4a9b-11dc-95b5-0000779fd2ac.html

New York has been given $354m (£175m) in federal aid to launch what would be the first London-style congestion pricing plan in the US.

The grant from the US department of transportation is a victory for the business and environmental groups that for years have been pushing – against considerable opposition – for the introduction of congestion pricing in New York.

Michael Bloomberg, New York’s mayor, embraced the idea this year by introducing a congestion pricing plan as part of his ambitious 25-year environmental programme for the city.
The federal transportation department seemed eager for New York to attempt congestion pricing, suggesting that it might encourage other cities to follow suit if it was successfully implemented.

But Mr Bloomberg still needs to win the support of state lawmakers, who put New York’s chance to receive the federal money at risk by missing the application deadline last month.
A compromise agreement was reached, with the state legislature forming a committee to study congestion pricing and other measures to reduce traffic. New York will receive the federal money only if the state legislature votes to support the congestion pricing plan within 90 days.

Mary Peters, US transportation secretary, praised Mr Bloomberg for introducing the plan. She said commuters spend an average of 49 hours a year stuck in traffic, up from 18 hours in 1982. “Mayor Bloomberg is not going to let traffic rob the Big Apple,” she said. “New Yorkers must understand that we must stop relying on Tuesday’s ideas to fight today’s traffic jams.”
The Partnership for New York City, a pro-business group that has led the effort to introduce congestion pricing, estimates that excess traffic costs the New York region $13bn a year in lost productivity.

As in London, local merchants fear that the congestion fee, which would charge drivers $8 to enter the city’s busiest district during peak hours, with trucks paying $21, will hurt small business.

The plan also faces opposition from city council members representing the “outer boroughs” of Brooklyn, Queens, the Bronx and Staten Island. Some areas of these boroughs are not well served by public transportation, they say, making the fees a burdensome tax on the middle classes. Others worry that drivers will clog up residential streets just outside the congestion zone.

But the federal money could ease some of these concerns. The city would receive $112m to boost an express bus service and $16m for its ferry lines.

Mr Bloomberg called the federal funding a “golden opportunity” to “reduce congestion, improve air quality and keep traffic tie-ups from choking our economy”.