Feds Threaten to Pull New York’s Transportation Funds Over Congestion Pricing War

The U.S. Department of Transportation poured even more pressure on New York to end congestion pricing, this time backing it up with detailed financial threats.

Gov. Kathy Hochul and the Metropolitan Transportation Authority have said that the $9 toll charged to drivers entering Manhattan’s central business district will continue until a judge orders the program to end, but the federal government said that all but safety-related funding for New York transportation needs could be pulled if the state doesn’t end the program before then.

The federal government has been giving Hochul and the MTA deadlines to prove the legality of congestion pricing — which was approved under the Biden administration — and demanding a plan for the orderly cessation of the tolls, but the matter is also being debated in court. The state has ignored federal deadlines set for March 21 and April 20, but now the feds have set a new deadline for May 21 for the toll cameras to turn off, according to a letter from U.S. DOT.

If the state doesn’t comply by then, federal funding through advance construction authorizations, National Environmental Policy Act and Statewide Transportation Improvement Program amendments could be at stake, according to Transportation Secretary Sean Duffy.

“President Trump and I will not sit back while Gov. Hochul engages in class warfare and prices working-class Americans out of accessing New York City,” Duffy said in a statement. “The federal government sends billions to New York — but we won’t foot the bill if Gov. Hochul continues to implement an illegal toll to backfill the budget of New York’s failing transit system. We are giving New York one last chance to turn back or prove their actions are not illegal.”

But the state agency and governor haven’t changed their tune about the threats from the federal government to the program and have stood their ground.

“We have received Secretary Duffy’s letter setting yet another new deadline and are evaluating MTA’s legal options, given that the legal issues raised in the letter are already appropriately before a federal judge,” MTA Chairman Janno Lieber said in a statement. “In the meantime, cameras are staying on, and New Yorkers continue to benefit from the first-in-the-nation congestion pricing program — with less traffic, cleaner air, safer streets and a stronger regional economy.” 

Hochul was also not moved to additional action by the warnings in Duffy’s letter.

“I received the letter from U.S. DOT extending their congestion pricing threats once again. I repeat: Congestion pricing is legal — and it’s working,” Hochul said in a statement. “Traffic is down, business is up, and the cameras are staying on.”

In the few months that President Donald Trump has been in office for a second term, relations between federal officials and New York State have been contentious, though the White House has failed to influence actions in Albany.

In February, Duffy initiated the move to end congestion pricing by revoking its federal approval, which triggered a lawsuit from the MTA and Hochul — but congestion pricing has gone undefeated in court thus far.

And last week, the Trump administration said it would take over the redevelopment of Pennsylvania Station from the state, criticizing its ability to move the $7.5 billion project along, to which Hochul and the MTA expressed gratitude.

Mark Hallum can be reached at [email protected].