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What Congestion Taxers Do Not Want You to Know

No Federal Funding is Guaranteed by Passing a Congestion Tax

It is well documented that the US Department of Transportation has no funds to grant [Source: letter to Governor Spitzer, Assembly Speaker Silver & State Senate Majority Leader Bruno from Congressman Peter DeFazio]. No supporter of the Congestion Tax ever disputed Congressman Peter DeFazio, Chair of the House Transportation and Infrastructure Committee's Subcommittee on Highways and Transit, who advised no Congressionally authorized program exists to provide federal funds. The money at best remains a request from USDOT to Congress. [see http://www.dot.gov/ bib2008/pdf/bib2008.pdf (page 16). The agency is soliciting applications for grants it will make IF Congress passes a budget that includes this funding. Most grantors solicit applications to award money they actually have in hand. Congress has the authority to make programmatic and funding decisions that affect the future availability of funds and the process for being awarded any money. At best any funds that may become available, even if pre-approved, depend not on the USDOT but on Congressional actions. Thus the City Congestion Tax scheme cannot rely on any promises of federal money because Congress had yet to authorize the program and any funds for it. The Federal budget fiscal year does not begin until October 1, 2007. The recently announced USDOT “award” only gives allocates $1.6 million outright and other funds including $10.4 million – separate grants of $5.4 million and $5 million “when needed and available” to implement a congestion pricing scheme that the city claims will cost $239.3 million – it may in fact cost much more – remain CONTINGENT and at the DISCRETION of USDOT to authorize and allocate, and more to the point the Memorandum of Understanding stated both sources of funding are “subject to appropriation” by Congress. [See also our report: $500 million from USDOT for congestion pricing: How real is this deal? And is it worthwhile?

No July 16 Deadline Ever Existed

The July 16 so-called deadline came and went. It really represented a collusion to force the State legislature to act without a full and independent review of the congestion tax proposal, without consideration on alternative measures to address traffic and revenue concerns. This just proves how the federal deadline for funding was anything but firm and clearly malleable [Source: Federal Register – http://a257.g.akamaitech.net/7/257/2422/ 01jan20061800/edocket.access. gpo.gov/2006/E6-20924.htm; July 13, 2007 New York Times Metro Section,Skepticism in Albany About Traffic Plan Deadline ( “a state government official with knowledge of the Washington meeting said the Mayor himself had urged federal officials to hold firm on the July 16 deadline”). It appears that Mayor Bloomberg is the official responsible for setting such a quick deadline on an issue that requires a thorough discussion on all aspects of his plan including the hardships it will cause to the working class of New York City and the surrounding suburbs. Now, because the State Assembly stood firm, other measures should get due consideration and there should be an open and honest debate. The public should keep watch. Keep NYC Congestion Tax free will. This creates an opportunity to engage all stakeholders as London did and design a plan that works for New York City, and should not require any reliance on any congestion tax scheme.

No Cure for Asthma

Asthma ought to be addressed. Congestion pricing will not reduce traffic, especially where we need to make a difference, including for our children. Greenhouse gases generated here by on-road vehicles declined by 5.6% between 1995 and 2005, while those generated by all other sources rose by 12.8%. The City’s own data suggest that the impact of congestion pricing on air quality and greenhouse gas emissions would be minimal, especially in areas outside the proposed Manhattan congestion pricing zone. It proposes no measures that address asthma where it impacts mosts: air pollution hot spots including The South Bronx, East Harlem, South Jamaica, Long Island City, and Bed-Stuy. It does nothing to address the background pollutants found in greater concentrations along heavily trafficked corridors in these communities, home to our most vulnerable New Yorkers and greatest numbers of those who suffer asthma, including younger children at risk. In the long run, it makes more sense to focus on how the City can help accelerate the transition to cleaner cars and trucks. Mayor Bloomberg has already begun to take some important steps in this direction. Yellow taxis, for example, account for one-fifth of all greenhouse gas emissions generated by on-road vehicles in New York City – about 4 percent of total GHG emissions Citywide. Over the course of next five years, the Mayor has proposed that the entire taxi fleet be converted to hybrid vehicles. City officials estimate that this shift will reduce emissions from taxis by about 50 percent – thus effecting a reduction of 2 percent in GHG emissions Citywide. With this one measure, the City will have achieved five times the reduction in emissions that it says would be achieved through congestion pricing. The City itself owns and operates about 26,000 cars, trucks, buses and other on-road vehicles. As with the taxi fleet, the Mayor has proposed to accelerate the City’s transition to hybrids and other types of low-emission vehicles. Completing this transition as quickly as possible should be a priority for the City. And while for some purposes – such as police, fire and other emergency services – there are clearly no real substitutes for motor vehicles, the City should also work to ensure that its own employees, to the greatest extent possible, use mass transit for work-related travel within the City. New York State can also accelerate the shift to low-emission vehicles by providing incentives to private owners. The State could, for example, provide a substantial but time-limited tax incentive to encourage conversion of corporate fleets to cleaner technology. The State might also explore the use of various forms of state aid – such as funding for school transportation and reimbursement for transportation of Medicaid patients – to provide incentives for use of low-emission vehicles. See also our report: Asthma and congestion pricing – a closer look

The Congestion Tax is Not Required to Qualify for Federal Funding

The promise of federal money does not require the adoption of this Congestion Tax Scheme; further it requires no plan involving congestion fee or tolls on free East River crossings. According to the USDOT, The VPP program permits funding of project costs to mitigate the impacts of pricing on low-income individuals. The ITS-OTMC program can also fund technology components of these investments. In addition, revenues from the pricing (tolling) activities themselves may also be used to support transit and parking capital and operations costs. Some of the other 10 discretionary programs would also support funding of parking and transit investments.” As a general matter, planning, design, and outreach costs can be funded. Funding may be “used to convert one or more existing free general-purpose lanes to HOT or Express Toll Lanes, including networks of such converted lanes....This includes networks of converted lanes. The US DOT seeks broad, comprehensive solutions to reducing congestion. However, there is no strict requirement that congestion pricing must be included, nor will non-congestion pricing strategies be excluded from consideration. The program specifically allows for the submission of any innovative congestion reducing strategy. ”[Source: http:// www.fightgridlocknow.gov/docs/upaqa070402.htm]

This Congestion Tax Will Not Result in Any Net Traffic Reduction

The City’s own figures suggest its congestion tax scheme will produce only a modest reduction in traffic congestion – the benefits of which have been wildly oversold. Between 1998 and 2004 (the last year for which data are available), the number of automobiles and trucks driven into the Manhattan CBD each day declined by 3.4 percent, while the number of people using mass transit to travel to the CBD rose by 10 percent. During the last decade, mass transit ridership has increased City-wide by 36 percent, far outpacing the growth of population and jobs during that period. The New York Metropolitan Transportation Council forecasts that even with continued population and job growth through 2030, congestion will be less severe than it was in 2005. Since the number of cars entering the Manhattan’s CBD is not rising, we need to look elsewhere for the major causes of congestion – double-parked vehicles, blocking the box, poor construction site management, etc. – and for practical ways to reduce it. At the same time, many residents and businesses located in the outer boroughs are underserved and lack convenient mass transit options. Congestion pricing would lead 90,000 people to switch to an already overburdened mass transit system. Many will have to travel substantial distances to get to an overcrowded subway. The money which would be spent building a flawed congestion pricing system would be better spent directly on mass transit improvements. [See our report: Congestion Pricing in the Manhattan Central Business District: Let’s Look Hard Before We Leap]

This Congestion Tax Provides Nowhere Near the Funding to Cover the Cost of All the Promised Projects.

Congestion pricing is extraordinarily inefficient as a revenue raiser. Proponents agree the scheme's annual operating costs would total $240 million out of $620 estimated gross revenues. People who live, work, do business in and visit New York would be paying $2 of every $5 million collected to the program and not on projects to improve mass transit and clean our air. Alternative measures exist to raise revenues for mass transit. State legislators raised various sales and mortgage recording taxes. The Queens Civic Congress proposes a revenue-sharing tax on non-city residents so the covered suburban counties benefit pro-rata; New York City would keep the revenue from out of state residents. Queens Civic Congress' innovative revenue proposal would provide 100% it collects – and double to triple the net revenue estimated by the Congestion Tax. By incessantly and misleadingly linking their proposal to the projected $31 billion shortfall in capital funding through 2030, and the prospect of a 20% fare hike, congestion tax supporters have sought to create the impression that it is the key to solving the region’s transportation capital financing problems. If charges are set at the proposed levels, revenues from this congestion tax on businesses and people driving into or within Midtown and Lower Manhattan would finance only a fraction of the projected shortfall. The Independent Budget Office projects a $799 million MTA fiscal year 2008 operating deficit, exceeding $1.45 billion in FY2009. If the Legislature were to approve the congestion tax tomorrow, it would produce nothing in FY2008, perhaps $200 million in FY2009, and net but $380 million in FY2010 – when the congestion tax would be fully operational – but the MTA’s deficit will reach $1.78 billion. Congestion tax revenues simply aren’t enough – and would arrive too late – to avert significant fare increases during the next two years. And this tax scheme got linked to the fare in an effort to diffuse opposition to the tax. See our report: Congestion pricing: No Salvation For the MTA.

Better Ways Exist

We do not need a congestion tax to address traffic congestion on our streets. Alternative measures exist to address congestion and traffic. We need better enforcement of the conditions that slow our buses and traffic in general. Traffic abatement measures include the posting of more traffic enforcement agents to avoid “box-blocking” to ensure traffic flow, and changing “blocking the box” from a moving to a parking violation which allows the use of cameras and fines to discourage that traffic-congesting activity. Other traffic measured would keep rush hour lanes and bus stops open, as well as attack double parking, and better regulate street and lane closings near construction sites. The City needs to end the overuse and inappropriate use of city, state, federal and international “permits” in no parking and restricted parking zones. Other measures include inducements to use mass transit – lower fares, lower express bus fares, reduced intra-city commuter railroad fares, and better bus connections to commuter rails. Legislation proposed by Assemblyman Rory Lancman would provide support for telecommuting. The congestion charge is simply another tax on business in a city that already ranks among the highest in the nation in taxes levied on its citizens.the $21 tax on delivery and service vehicles, will inevitably be passed on to the customers of all of the retailers, residents, restaurant operators and night club owners in the city. See our report: Alternative Approaches to Traffic Congestion Mitigation in the Manhattan Central Business District.