Will Congestion Pricing Fly in New York?

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London has successfully instituted congestion pricing for private vehicles, and New York Mayor Michael Bloomberg has been trying very hard to do the same, but ran into stiff opposition from the public as well as political players.

New York magazine reports, however, that Bloomberg has just gained an important ally: New York’s new governor, David Paterson. According to New York:

Paterson’s former district hasn’t been sympathetic to the mayor’s congestion pricing plan — many fear Harlem will become a commuter parking lot — but with his first rough week, Paterson could use friends. “He needs an ally in the mayor,” says one source close to Bloomberg.

Now to convince the public. The compelling poster above appears on a bus stop about 20 yards north of 96th Street, the cutoff point for the congestion charge.

[CORRECTION: The proposed northern boundary for Manhattan congestion pricing is no longer 96th St.; it is now 60th St.]

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  1. TT says:

    Just another tax, the American people are taxed enough and with Barack Hussein Obama in office things will get much worse. He has already talked about taxing more.

    http://dailychatter.wordpress.com

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  2. a student of Economics says:

    Three points:

    1. Most of the public doesn’t realize that they already pay more in lost time, productivity and pollution than they would in congestion pricing fees. The difference is that the congestion fees create revenue that can be used to improve transit, cut other taxes, or both. Time spent in traffic and extra pollution are just pure waste, benefitting no one.

    2. As the poster suggests, the biggest beneficiaries of congestion pricing in London people who take buses. They are generally poor and middle class.

    3. It’s foolish to allocate a scarce resource mainly by having people queue up. That’s why we don’t do it for other goods and services.

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  3. Brian Miller says:

    It’s a load of crap.

    1. The combined costs of tolls and parking already provide the maximum deterrent to typical commuters. Adding congestion pricing would have near zero impact.

    2. The NYS budget is a complete shell game, and will continue to be for the foreseeable future. Any revenue that comes from congestion pricing is just revenue – there can be no guarantee that the funds will go toward transit, or anything else in particular.

    Congestion pricing is nothing more than an arbitrary tax, and it will simply do more harm than good.

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  4. chappy says:

    My question is can the subways support the obvious substitution effect. Won’t that increased demand eventually require increased subway fares?

    Anyway, I live in Washington, DC and they are getting ready to institute ‘hot lanes’ or optional toll lanes (or so-called “Lexus Lanes”) on the beltway around DC. Anyway, I think it has a high potential to fail here because there are only so many ways to get into the city and I’m not sure people will be satified by flying through their ‘hot lane’ only to witness a severe choke point at the end.

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  5. Donny says:

    While I generally am opposed to taking money out of the hands of people and into the hands of government, this type of tax is better than most.

    In economicsspeak, this is a Pigouvian tax. If you set the marginal tax rate equal to the marginal social cost, you can make the people who create the negative externality (traffic, potholes, whatever) “feel” the full extent of the harm they are causing. It makes sense that the people that cause the damage should pay for it, at long as transaction costs are low.

    For instance, say there’s a bridge in a state that costs money to keep in good condition. You could:
    1) Tax the entire country and use federal highway money to fix it.
    2) Tax the entire state and use state funds to fix it.
    3) Tax all drivers in the state and use gasoline tax revenue to fix it.
    4) Tax only the people that actually use the bridge and use toll revenue to fix it.

    Which makes the most sense?

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  6. David in NYC says:

    TT –

    Americans are NOT “taxed enough” (my guess is that anything more than 0% is “enough” for you). We are taxed LESS than almost every other developed economy in the world (South Korea and Mexico tax less) — and we have the infrastructure, health care, education system, etc. to prove it.

    Tax Revenue as a Percentage of GDP

    Also, I am curious as to why you thought a link to pictures of cheerleaders was relevant to this topic.

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  7. David in NYC says:

    Brian Williams –

    Actually, it’s your comment that’s a load of crap.

    You apparently did not even open the link to London’s experience in the first sentence of this post. If you had, you would have seen this:

    “This has significantly reduced traffic
    congestion, improved bus and taxi service, and generates substantial revenues.”

    This is based on a 3-year, real-world program in a city that is roughly comparable to NYC in terms of population, congestion, etc. Your comments are based on exactly what evidence, besides your opinion?

    And your comment that “[t]he combined costs of tolls and parking already provide the maximum deterrent to typical commuters” is ridiculous beyond belief. So, if tolls and parking costs doubled, tripled, or quadrupled it would make no difference at all? If we have “already” reached the “maximum deterrent”, then, by your logic, this would have zero effect. Clearly, this is utter nonsense.

    It is this kind of head-in-the-sand thinking that got us into this fix in the first place.

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  8. miriam says:

    Congestion charging works well in London. It doesn’t hit the poorest (the least likely to own cars and who spend the smallest proportion of their income on cars)

    In the last few years, it’s made life a lot easier for cyclists, and generally freed things up, and I’m looking forward to the differential pricing so that the bigger vehicles get hit hardest.

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