New Jersey sues to block New York City’s congestion pricing scheme

Receive free New York City updates

We’ll send you a myFT Daily Digest email rounding up the latest New York City news every morning.

The state of New Jersey has sued to suspend the rollout of the first congestion charge in the US, planned for cars driving through central Manhattan, saying that such a scheme would divert pollution to neighbouring areas and impose an unfair cost on commuters crossing the Hudson river. 

In a complaint filed in federal court on Friday, New Jersey accused government agencies of turning “a blind eye” to the environmental effects of the charge on the Garden State when agreeing to approve the scheme last month, and administrators in New York of failing to distribute the proceeds of such a scheme fairly across the broader metropolitan region.

The intervention by New Jersey comes just hours after Britain’s Conservative party narrowly hung on to a seat previously held by Boris Johnson on the outskirts of London, in a victory widely attributed to anger at the expansion of the city’s Ultra Low Emission Zone.

A congestion charge for Manhattan — the most congested urban area in the US — was first proposed by former New York mayor Michael Bloomberg 16 years ago, but was defeated by state lawmakers before being resurrected in 2019. 

Last month, the Federal Highway Administration approved the proposed scheme, which aims to generate $15bn in revenue for the MTA, New York’s perennially cash-strapped public transport body, by charging drivers to enter Manhattan below 60th Street. The precise charge has not been established but is reported to be as high as $23 a day for some drivers.

New Jersey’s governor Phil Murphy has long condemned the scheme as unfair to the 400,000 residents of the state who commute to Manhattan daily, and vowed to explore all legal options to frustrate its implementation. His state has passed legislation that gives tax incentives to businesses in a retaliatory attempt to lure them away from New York.

This year, New Jersey also rolled out billboard advertisements across New York, with slogans such as “Paying a congestion tax to sit in NYC traffic? Get outta here” — and a call for passers-by to consider relocating to New Jersey.

“We can’t fix a broken MTA in New York City on the back of New Jersey commuters,” Murphy said this month. “It’s a huge tax on them, and frankly, it challenges our environment because of all the rerouting of traffic.”

In its lawsuit, New Jersey accused New York of setting aside funds for areas affected by the scheme in its state while neglecting nearby counties.

“The [Federal Highway Administration] acknowledges that diversion of traffic . . . to bordering neighbourhoods will have impacts on air quality in those neighbourhoods, so the MTA proposes to fund mitigation efforts in the Bronx to the tune of $130mn,” its complaint said. “But not so for New Jersey.”

Lawyers for the state added that the MTA had also agreed to allocate 10 per cent of revenues from the scheme to the Long Island Rail Road and 10 per cent to Metro-North Railroad, which brings commuters in from upstate New York, “but nothing to New Jersey’s transit agencies”.

The US Department of Transport’s Federal Highway Administration said it did not comment on pending litigation. The office of New York governor Kathy Hochul did not immediately respond to a request for comment.