campaign for new york's future

News Release

SEVEN REASONS WHY THE QUEENS CHAMBER OF COMMERCE REPORT ON CONGESTION PRICING IS WRONG
Tuesday, May 22, 2007

SUMMARY

“Keep NYC Congestion Tax Free” has issued a revised version of a misleading report on the merits of congestion pricing – a policy proposed by Mayor Michael Bloomberg to tackle traffic congestion, reduce air pollution and fund a host of badly-needed improvements in our transit system. 

The report was authored by Appleseed ­ an economic development firm – and commissioned by the Queens Chamber of Commerce.  Nowhere in the report are any of the claimed “business, civic and labor groups” in “Keep NYC Congestion Tax Free” listed; in reality, the group has ties to the special-interest Metropolitan Parking Association.

Their report uses an unfair analysis of congestion pricing, which is supported by a wide range of groups – from the Central Labor Council of New York City to Environmental Defense to the Straphangers Campaign.  Instead, the report argues without adequate evidence that congestion pricing would have a negative effect on the region’s economy, and that the challenge of congestion can be tackled without congestion pricing. 

The report admits that transit desperately needs fixing and expansion, but fails to address in any detail how the city and region will raise the money to fund $30 billion in necessary transit infrastructure improvements.  Instead, calling congestion “inevitable” and a sign of an economy’s health it raises the possibility of raising taxes and transit fares.

Once again, the group determined their outcome and then backed their way in using analysis with serious flaws, and without a comprehensive solution – including sources of financing – to the city’s traffic and transportation challenges.  New Yorkers deserve better.

Provided below are just a few of the undefended and highly questionable assumptions, false arguments and troubling interpretations of available data found in the Appleseed study.

  1. The report calls congestion “inevitable,” striking a tone of surrendering to traffic and the poor air quality it causes.  The Appleseed report opens by saying, “Traffic congestion, like bad weather, is one of those things that everybody complains about, but nobody seems able to fix.  And indeed, in large cities like New York, some degree of congestion is inevitable – an unavoidable by-product of urban density…. And essential to the health of [New York’s] economy.”  In contrast, Mayor Bloomberg’s congestion pricing plan tackles traffic right on.   Active enforcement of traffic rules, the use of information technology, expanding the force of traffic enforcement agents, promoting bicycle use, and other initiatives are part of the Mayor’s plan – couple with congestion pricing.
  1. The report raises the specter of tax and fare hikes as an alternative to congestion pricing.  The report admits: “A good case can be made that New York needs to increase substantially its investments in the city’s transit system.  And then goes on to say, “If so, then New Yorkers need to think carefully about how best to finance that investment – how to strike the right balance to finance among fare box revenues, city and state taxes and subsidies paid by motorists – and how to do so efficiently, equitably and with the least possible cost to the city’s economy.”
  1. The study continues to underestimate the benefits of congestion pricing.  In order to figure out the positive impact of less congestion, it is first necessary to determine the negative impact that congestion now has on the City’s economy.  According to the study, this negative impact equals approximately $23 per hour spent in traffic.  However, this figure is largely based on national averages for wages.  Correcting for the higher average wages in the New York area and Manhattan, the cost of congestion in the relevant parts of Manhattan – and therefore the benefit of clearing this congestion – would nearly double, in turn, nearly doubling the benefit of congestion pricing estimated by the study. 

Further, the report counts as a loss to the New York economy the reduced spending of those who are forced to pay the congestion charge.  However, the study ignores the fact that money spent on the congestion charge would not simply evaporate.  Far from that, the proceeds from congestion pricing will fund transit improvements in the City.  Not only would these dollars not be lost to the City economy, they will generate more economic activity in the City by improving the City’s competitiveness.

  1. The study’s calculation of the cost of congestion pricing on New York City’s economy has changed dramatically, and is still wrong.   An earlier report stated that congestion pricing would cost $1.89 billion; the current one cites a figure of $690 million.  It provides no sense of how this was calculated, but several things stand out. 
  • The figure requires the reader to believe that the average person who chooses not to go to New York City at all because of an $8 change spends an average of $90-130 on every trip into the city.  Which raises 2 issues: How could the average commuter, who travels to Manhattan, spends 8 hours a day at work, spend an average of $90-130 on lunch every day?  And if they did spend that much, Why would someone who spends that much really be dissuaded by an $8 charge? 
  • Based on this, the study argues that 6,300 to 7,100 jobs will be lost – but it fails to consider the thousands more jobs that will be created by increased transit ridership, by the implementation of the system, and – above all else – by the investment of $30 billion in needed transit improvements that the Mayor’s plan will facilitate – about half of which will be funded by congestion pricing. 
  • The study estimates a fictitious “compliance cost” of $100 million – but that is based on an assumption that it takes every driver 5 minutes to pay the fee, even though there will be no toll booths, and over 70 percent of New Yorkers have EZPass.  
  • Lastly, the study invents a new cost associated with the supposed longer commute times of those who would now use public transportation instead of driving.  The study underestimates the driving times of these consumers by ignoring the fact that these commuters would be driving into the CBD during rush hour and absurdly implies that their final destination is the nearest boarder of the CBD, ignoring the additional driving time they would incur within the CBD.  Moreover, most drivers find their commutes unreliable and need to allow for additional time for traffic.
  • In addition to underestimating the driving times, the Study also conveniently ignores that congestion pricing will fund massive investments in public transportation, significantly speeding commute times for those who decide not to drive.
  1. The study still paints a distorted picture of London’s experience – attempting to argue that the congestion pricing system there is unpopular.  As London Mayor Ken Livingstone pointed out during the recent C40 Climate Summit in New York, the congestion pricing system was recommended by businesses and is widely popular.  It states, inaccurately, that the “system’s high operating costs” led to an increase in the charge in London – when in fact that was a policy decision not driven by operating costs, but by a desire to fund further transit routes. 

It states that traffic increased on the routes around London – while ignoring the fact that that increase was due to new bus lines, and that auto traffic on those routes actually declined.  Above all else, it ignores the fact that Mayor Ken Livingstone, who implemented the system, was reelected by a sizeable majority, and that in Stockholm, Sweden, a similar system actually won the support of a referendum.

Further, the Study misleadingly relies on a poll of London businesses to argue that congestion pricing had an impact on the local retail market.  The study ignores that congestion pricing was rolled out in London as the world and England slipped into an economic slowdown - the real cause of the lower retail sales.  Numerous rigorous academic studies have clearly shown that congestion pricing had no measurable effect on local retail activity (while having significant other positive effects).  Unless Appleseed is prepared to argue that congestion pricing in London sparked an international economic slowdown, these claims are simply wrong. 

  1. The study is guilty of the selective use of data.  It mentions, for example, that the number of cars entering Manhattan’s CBD declined between 1998 and 2004 – but that time period includes the impact of September 11.  After a dramatic decline in the aftermath of the attacks, the number of vehicles entering the CBD has been rising once again.  Similarly, it argues that the average income of those who drive into Manhattan is $43,294 – while ignoring the fact that subway and bus riders, who would benefit from the $30 billion in investments in the Mayor’s plan – average only $34,085.  The report cites one 2006 poll that argues that New Yorkers oppose congestion pricing – but ignores a poll done for the Tri-State Transportation Campaign at about the same time that showed that New Yorkers were evenly split between supporters and opponents, and a recent Partnership for New York City poll that – even among the 4.6% of New Yorkers who drive to work in Manhattan, a third actually supported congestion pricing themselves.
  1. The report relies on speculation to scare New Yorkers.  It states that air quality could decline around the Cross-Bronx Expressway because of increased traffic – even though the detailed modeling done by the City showed that traffic would decline in every borough. 

 

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