Lawmakers respond to NY congestion pricing with plan to tax out-of-state drivers (updated)

New Jersey lawmakers are considering a counterattack to New York’s proposed congestion pricing proposal with their own fee on all non-residents driving into the state.

The proposal does not have a bill number, nor has it been formally introduced in either chamber of the state Legislature, but lawmakers say the money collected from this new surtax would help soften the blow that New Jersey commuters may feel in their wallets when traveling into New York City.

New York officials proposed congestion pricing as a means to tax drivers coming from New Jersey into New York during rush hour traffic. Under the plan, city officials would levy a once-daily toll for vehicles entering the “Central Business District,” which stretches from the south end of Central Park all the way to Battery Park at the south end of Manhattan Island.

Federal officials are allowing the plan to move forward with several key public review sessions necessary for approval. But, several members of New Jersey’s congressional delegation are asking the Biden administration to slow-walk the process.

The city estimated that prior to the COVID-19 pandemic and the shift to telecommuting and social distancing practices, several hundred thousand cars entered that swathe of Manhattan each day.

It is estimated the plan would generate $15 billion for the city over four years, which local officials and those at the Metropolitan Transportation Authority said will go toward desperately needed upgrades to New York City’s sprawling subway system.

MTA officials decried the proposal as “NIMBYism and legally dubious taxation.” The phrase NIMBY is short for “not in my backyard,” an oft-cited phrase by residents in opposition to nearby redevelopment.

“Congestion pricing will benefit everyone who comes to New York, including those from New Jersey, by providing reduced traffic and better air quality,” said Ken Lovett, a senior advisor for MTA head Pat Foye. “We are at the beginning of a transparent process that will take into consideration potential credits, discounts and exemptions for tolls paid on bridges and crossings, and that process must play out.”

Gov. Phil Murphy and New York Gov. Andrew Cuomo, in April 2019, announced a tentative “conceptual understanding” under which New Jersey would forgo any revenue from the surcharge. Under that loose agreement, drivers on the three Hudson River crossings – the George Washington Bridge and the Lincoln and Holland tunnels – would be credited for the amount already paid in tolls.

But New Jersey lawmakers are responding in kind with their own version of the proposal should state and city officials adopt the plan.

According to one likely sponsor, Sen. Joe Lagana, D-38th District, the proposal would tax all non-New Jersey drivers and use the funds for a rebate that would help commuters recoup some of the money spent on New York’s new toll.

“We simply cannot expect a robust recovery and return to in-person work to be successful while workers needed in New York City are being penalized simply for going to their jobs,” Lagana said at a May 10 morning press conference outside the Paramus Borough Hall alongside Route 17, a heavily traveled highway in Bergen County that leads to the George Washington Bridge crossing. “New Jersey is not New York’s piggy bank.”

The tax would exempt New Jersey drivers, according to U.S. Rep Josh Gottheimer, a Democrat who represents much of Bergen County and commuters to New York City, and who dubbed New York’s proposal the “Manhattan moocher congestion tax.”

“They’re trying to hit us with a congestion tax. We’ve got to take care of our own here,” Gottheimer added.

Should drivers have to pay the congestion fee, U.S. Rep Bill Pascrell, D-9th District, estimated the new costs would mean another $3,000 of travel expenses for New Jersey commuters across the Hudson River.

Editor’s note: This story was updated at 2:32 p.m. EST on May 10, 2021, to include comments from the MTA.