President Trump, a lifelong New Yorker who only moved to Florida in 2019 during his first term, knows that New York City's Congestion Pricing plan is a bad idea. He said so during the recent campaign, promising City residents and New Jersey commuters that he would use federal powers to halt the congestion pricing because it would hurt New York's dynamic economy. As the New York Times reported, Gov. Philip D. Murphy of New Jersey, a popular Democrat, called it "a disaster for working- and middle-class New Jersey commuters and residents" in a letter to Mr. Trump.
Congestion pricing is a new system designed to reduce traffic congestion, improve air quality, and raise revenue for public transportation improvements, particularly for the Metropolitan Transportation Authority (MTA). Drivers entering Manhattan south of 60th Street during peak hours will be charged a $9 fee, set to rise to $12 by 2028 and $15 by 2031. The pricing is dynamic, meaning charges vary depending on the time of day (higher fees during peak hours).
By making driving into Manhattan more expensive, the City hopes to reduce the number of vehicles in congested areas. The program is expected to generate approximately $500 million annually, which will support MTA operations and fund mass transit improvements like subway and bus services.
The Big Apple is one of the best cities in the world to visit. But it is a terrible place to live, even before the Congestion Pricing plan went into effect on January 5. Still, millions of New Yorkers love living there so much that they cannot fathom living anywhere else. But that love stems from an emotional connection that people have to NYC, not based on logic or common sense.
NYC's appeal lies in its mix of ambition, art, music, theater, sports, entertainment, culture, history, and energy. It's a place where dreams are made, and the possibilities feel endless. As the world's melting pot, residents can experience a wide variety of customs, foods, languages, and lifestyles. As the finance, technology, publishing, and advertising capital of the world, it attracts an endless supply of dreamers.
However, what is also true is that New York is one of the most expensive cities in the world, with a cost of living that is significantly higher than that of other American cities. The median rent for a one-bedroom apartment in NYC is around $3,500 per month, while the national median is approximately $1,500. NYC's median price for a two-bedroom apartment is about $4,700, compared to the national median of around $1,800.
Attempting to own a home is worse. As of December 2024, the median home price in New York City was approximately $746,000, whereas the national median home price stood at $419,200. In Manhattan, the median home lists for $1.6 million.
The tax regime is brutal. New Yorkers pay a state income tax, which ranges from 4% to 10.9%, with most middle-class residents paying 5.85% to 6.85%. The City levies its income tax on top, ranging from 3.078% to 3.876%, depending on income. New Yorkers give up nearly ten percent of their income to state and city bureaucracies in return for what services, exactly?
Owning a car is so unaffordable that most New Yorkers don't even consider it. Median auto insurance rates run about $3,300 per year compared to about $1,582 nationwide. There isn't sufficient street parking, so many residents pay to park their cars in garages, an additional cost of nearly $500 a month. And don't forget the tolls. Nearly every bridge or tunnel charges a toll, averaging $16 for each round trip on pathways crossing the Hudson. In 2023, the Metropolitan Transportation Authority (MTA) reported that its bridges and tunnels generated over $2.4 billion in toll revenues. While there are free bridges and tunnels, the traffic into and out of them can be horrendous.
Despite all of the above inconveniences and costs, a New Yorker would still say that living in the Big Apple is worth it—until the congestion pricing plan took effect on January 5.
A Siena poll in December showed that even at a highly discounted $9 level, New Yorkers strongly opposed the congestion pricing plan by 51-29%, including opposition from 56% of New York City voters and 60% of downstate suburbanites. Even New Yorkers have limits on how much they can be exploited.
Supporters of the congestion pricing plan often compare it to the successes of cities like Singapore and London with similar models but fail to acknowledge that those cities operate world-class public transportation systems. The MTA, by contrast, has done little to improve the quality of life for the average commuter.
New York City's subways are a hassle and, these days, dangerous. Only about 30% of subway stations have escalators or elevators, limiting accessibility, especially for those with mobility challenges. Getting to any of the NYC airports using public transportation is a nightmare, requiring multiple connections that take too long. Thefts and pickpocketing are typical in crowded trains, especially during rush hours. High-profile incidents involve random attacks on passengers or confrontations between individuals. For an agency that has an operating budget of nearly $20 billion and a bloated workforce of more than 70,000 employees, the MTA perennially faces revenue shortfalls.
Congestion pricing forces New Yorkers to use these subways and drive even more money to the MTA, knowing well that the MTA has been a lousy steward of the subway system. The MTA spends so much money on everything that it reported spending $500 million on cameras and sensors to implement congestion pricing in an area of about 60 square miles. How could it cost $8 million per square mile to mount toll technology?
President Trump should end the MTA's avarice and withhold federal permissions until the MTA completely reengineers its operating model and delivers a plan to return to profitability.
Successful New Yorkers shouldn’t be forced to subsidize the MTA’s failure.
Rajkamal Rao is a columnist and a member of the tippinsights editorial board. He is an American entrepreneur and wrote the WorldView column for the Hindu BusinessLine, India's second-largest financial newspaper, on the economy, politics, immigration, foreign affairs, and sports.
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