Trump Administration Slams the Brakes on New York City’s Congestion Tolling Program

The Trump administration announced on February 19, 2025, that it is withdrawing the federal government’s approval of New York City's new congestion pricing program. The program was approved by DOT under the Biden Administration on November 21, 2024, by the Federal Highway Administration (FHWA), and New York started the program on January 5, 2025.

The program was intended to reduce traffic in Manhattan and raise revenue to upgrade New York’s agency subway and bus system. Passenger vehicles were charged $9 to enter Manhattan south of 60th Street during peak periods. Trucks and buses were charged up to $21.60. At night, the fee was reduced by 75%. The city estimated that the congestion pricing program would have brought in $500 million in its first year.

The Value Pricing Pilot Program (VPPP) was established by the U.S. Congress as the Congestion Pricing Pilot Program in 1991 and was reauthorized in each subsequent highway authorization legislation. Its purpose is to provide transportation agencies with options to manage congestion on highways through tolling and other pricing mechanisms. 

To qualify for the pilot program, a city or state is required to provide: 

• A description of the congestion problem being addressed (current and projected)

• The proposed pricing program, including facilities, expected pricing schedules, technology, enforcement programs, and other details

• The project schedule and preliminary estimates of the social and economic effects of the pricing program, including potential equity impacts, and a plan for refining these estimates

• The role of alternative transportation modes in the project and any anticipated enhancements

• Plans for involving the public and key affected parties, building coalitions, and maintaining media relations, as well as monitoring and evaluating the program, including data collection and analysis

• A detailed traffic and revenue plan, including a budget for capital and operating costs, all funding sources, and planned expenditures

• Plans for meeting all Federal, State, and local legal and administrative requirements, including necessary Federal-aid planning and environmental requirements

• The extent to which legal and administrative authority have been obtained, and/or plans for obtaining authority as necessary

In a letter to Governor Kathy Hochul, the new Secretary of Transportation, Sean Duffy, expressed the view that the congestion pricing program is beyond the scope of approval as a "Value Pricing Pilot Program" authorized by Congress, in part, because it appears to be "driven primarily by the need to raise revenue for the Metropolitan Transit Authority (MTA) system as opposed to the need to reduce congestion."

 Although the Secretary stated a concern with MTA’s revenue-raising from the project, the Project Description attached to and made part of the VPPP Agreement executed on November 21, 2024, between the FHWA and the New York participants expressly provides for the investment in public transit systems:

 Traffic congestion is expected to be reduced by disincentivizing the use of vehicles within the CBD by the imposition of tolls and concurrently by investments in transit that will incentivize use of transit systems instead of driving. 

 After Secretary Duffy sent the withdrawal letter to Governor Hochul, President Trump announced on Truth Social, "CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!"

In response, the Governor noted the initial success of Manhattan’s program and then responded more tersely: “We’ll see you in court.” The MTA has already taken legal action to fight the administration’s decision. The Chair of the MTA, Janno Lieber, issued the following statement.

"Today, the MTA filed papers in federal court to ensure that the highly successful program – which has already dramatically reduced congestion, bringing reduced traffic and faster travel times while increasing speeds for buses and emergency vehicles – will continue, notwithstanding this baseless effort to snatch those benefits away from the millions of mass transit users, pedestrians and, especially, the drivers who come to the Manhattan Central Business District." Lieber continued: "It’s mystifying that after four years and 4,000 pages of federally-supervised environmental review – and barely three months after giving final approval to the Congestion Relief Program – USDOT would seek to reverse course.”

The MTA’s lawsuit filed on February 19, 2025, alleges that the federal government’s unilateral termination of the VPPP agreement executed on November 21, 2024, violates the Administrative Procedures Act because “The acts of all executive branch officers ‘must be justified by some law,’” citing Am. Sch. of Magnetic Healing v. McAnnulty, 187 U.S. 94, 108 (1902); and that, under the APA, a court must “hold unlawful and set aside agency action, findings, and conclusions found to be contrary to constitutional right, power, privilege, or immunity,” or “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.” 5 U.S.C. §§ 706(2)(B)-(C). The complaint avers that the Trump Administration’s unilateral action is ultra vires, that it violates the due process clause of the U.S. Constitution since New York City has a property interest in the VPPP Agreement, and finally, that the termination by the FHWA is a new final agency action, a step the agency took without meeting the requirements of the National Environmental Policy Act.

An interesting aspect of this litigation is whether or how the court will view the new administration’s interpretation of the requirements of the pilot program. Under last year’s Supreme Court decision in Loper v. Raimondo, the Supreme Court decided that the courts were no longer obligated to defer to federal agencies’ interpretations of the statutes authorizing those agencies’ programs. Therefore, the Loper decision gives the MTA a greater opportunity than it would have had just a year ago to convince the Court that the administration’s view that a city’s interest in raising revenue disqualifies it from the pilot program is an incorrect interpretation of the pilot program statute.

Related Resources

View the complaint filed by Metropolitan Transit Authority vs. Sean Duffy, Secretary of US Department of Transportation on 2/19/25.

View the Secretary of Transportation’s letter to New York Governor Kathy Hochul.

View the original MTA/USDOT agreement allowing the pilot program (congestion tolling program).

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