Gov. Kathy Hochul defended her decision to halt congestion pricing hours after State Senate Democrats said they would leave Albany without plugging the funding gap left in its absence.
In her first public appearance since announcing she would backtrack from the plan, Ms. Hochul reiterated that the time was not right to increase the burden on New York City’s economy.
“We thought that inflation would be lower,” she said at a news conference Friday night. “We thought that people would feel more secure about going on the subways. Yes, yes, we’re coming back, but we can’t afford a setback.”
At the news conference, Ms. Hochul was pressed for details about when she had changed her mind about congestion pricing and whom she had spoken to beforehand.
While she declined to provide details about the timing of her decision, she described conversations she said she had had with ordinary New Yorkers in diners, naming three diners on the East Side of Manhattan.
Her decision leaves a billion-dollar hole in the Metropolitan Transportation Authority’s budget, imperiling planned projects and raising grave questions about the future of public transit in the nation’s largest city.
Senator Andrea Stewart-Cousins, the majority leader, told reporters late Friday that her caucus had not been able to rally around any of the budget proposals being offered in the session’s final hours and would leave for the year without a legislative fix.
She said they were “trying to figure out a way” to both ease congestion and provide funding for the authority, which oversees the city’s subway and buses and some commuter rail lines.
Late Friday night, the M.T.A. said it was evaluating changes to its capital program in light of the delay. Plans to update signals, make stations accessible to people with disabilities and transition to electric buses would most likely be “deprioritized to protect and preserve the basic operation and functionality of this 100-plus-year-old system,” according to a statement from two top M.T.A. officials.
The senators’ announcement followed two days of frantic negotiations after Ms. Hochul said she wanted to halt the tolling plan “indefinitely” over concerns that it could hamper New York’s economic recovery from the coronavirus pandemic.
The congestion pricing plan, which had been set to take effect on June 30, would have charged most drivers $15 to enter Manhattan’s central business district south of 60th Street, with the goal of reducing pollution and traffic and creating $1 billion a year in revenue for the struggling authority
In her appearance on Friday evening, Ms. Hochul praised the legislative leaders, saying she had worked closely with them over the session to make landmark accomplishments on housing and social media regulations.
She said that she had secured commitments from the leaders to take action on the authority’s funding at some point, even if legislation had not emerged.
“We don’t need to take immediate action,” she told reporters, adding, “I am prepared to continue working with them from this moment on.”
A Senate spokesman described the agreement somewhat differently, saying it was a commitment “to keep talking, I guess.”
The Senate Democrats’ decision to leave without a replacement plan puts Ms. Hochul and the authority in a difficult position.
Without a new funding stream, not only are the authority’s planned capital projects in question, so are its day-to-day operations. And although Ms. Hochul controls the authority board, the members have yet to formally vote to halt the plan. That has led congestion pricing advocates to pin their hopes on the unlikely possibility that the board could defy the governor and proceed with the tolls as planned.
On Friday, Ms. Hochul dashed those hopes, telling reporters that she did not believe a board vote was necessary. In its statement Friday night, the M.T.A. appeared to agree, saying that moving forward with the program would require the consent of the state, the city and the federal government, and Ms. Hochul’s announcement had effectively withdrawn the state’s approval.
Carl E. Heastie, the Assembly’s Democratic speaker, suggested earlier Friday that his members were open to various options, including a special session or revisiting the issue next year. “You have to make a decision on raising revenues,” he said.
Lawmakers were blindsided when news broke late on Tuesday that Ms. Hochul had abandoned the plan she had so recently championed.
The shock quickly turned into anger as the ramifications of the decision not to move forward with congestion pricing without a viable alternative for transit funding became clear.
“Derailing this important program at the last moment and asking the Legislature to come up with an alternative funding mechanism in less than 48 hours is irresponsible, and inconsistent with the principles of good governance,” Senator Michael Gianaris, the deputy majority leader, said in a statement.
Zellnor Myrie, a Democratic state senator from central Brooklyn who is exploring a run for mayor, criticized the governor for what he called “a profound lack of leadership,” particularly when the city’s public transit system is in such dire need of a financial infusion.
And in an op-ed for The Daily News, Senator Liz Krueger, a sometime ally of Ms. Hochul’s, called the governor’s decision “a staggering error” that could violate state law.
The rhetoric signaled a deterioration of a once-celebrated relationship between Ms. Hochul and Democrats in the state Legislature. When Ms. Hochul took office in 2021, she worked to win the trust of state lawmakers, promising a new era of transparency and collaboration.
But a series of events since then — from Ms. Hochul’s repeated and public push to roll back the Legislature’s signature bail reform legislation to the Senate’s refusal to confirm her top choice for chief judge of the Court of Appeals — eroded much of the good will.
Ms. Hochul suggested that the funding gap created by her congestion-pricing decision could be filled with a payroll tax on New York City businesses. But lawmakers balked at that plan, which would have shifted the financial burden from commuters onto city residents.
Lawmakers and the governor’s advisers said Ms. Hochul had grown increasingly concerned in recent weeks over disapproval of congestion pricing among New Yorkers. A Siena College poll in April of about 800 registered New York voters found that 63 percent opposed the measure.
An additional concern, she said, was the city’s recovery from the pandemic, which has left office occupancy rates low. Ms. Hochul has said many times that she would like to see New York City busier, particularly in its commercial districts. Congestion pricing critics said the tolls would further deter workers from returning to the office.
Even as Ms. Stewart-Cousins announced that her members would leave Albany without taking action, she left open the possibility of returning for a special session.
“We do come back, as things warrant,” she said, adding, “We will continue to work on this issue because it’s important.”
Ana Ley contributed reporting.
