Gov Kathy Hochul faces backlash after pushing for NYC tax hike to replace congestion pricing tolls

NEW YORK: Governor Kathy Hochul faces intense backlash after proposing a tax hike for New York City to replace the indefinitely postponed $15 congestion pricing tolls.

The backlash intensified after Hochul postponed the congestion pricing plan on Wednesday, citing concerns that it would "break the budget" for the working class. Assemblyman Matt Slater (R-Putnam) labeled the proposed tax increase as an "insulting joke" that would worsen the affordability crisis the governor herself highlighted as a reason for halting congestion pricing.

“The combination of corporate income, payroll and other taxes on New York City businesses already has them paying some of the highest effective rates in the nation,” noted director of research at the Empire Center for Public Policy, Ken Girardin. 

Doubt cast over viability of tax proposal as MTA turmoil intensifies

The tax proposal has been met with resistance from key political figures, who express doubts about its viability. State Senator Liz Krueger (D-Manhattan) voiced her skepticism about the tax gaining legislative support, while Assemblyman Brian Cunningham (D-Brooklyn) firmly opposed "no new taxes."

The sudden announcement has also caused turmoil within the Metropolitan Transportation Authority (MTA), with MTA Chair and CEO Janno Lieber, alongside Hochul’s board appointees, threatening to resign, according to a state Senate source. The timing complicates matters further, as Albany lawmakers are set to adjourn for the legislative session on Friday. This deadline leaves major MTA projects in jeopardy, as officials scramble to replace the $1 billion annually that the congestion pricing tolls were projected to generate.

While opponents of congestion pricing have hailed Hochul’s decision as a win for everyday New Yorkers, they have yet to present concrete solutions to the ensuing funding gap. State Assemblyman David Weprin (D-Queens) mentioned the possibility of hiking the payroll mobility tax, though he remained vague about other proposals.

“You’ll find out within a week,” he stated. “We’re committed to find a billion dollars.” The payroll mobility tax, currently levied on businesses and self-employed workers in New York City and the surrounding region, was increased last year to raise $1.1 billion annually for the MTA. Hochul has also suggested tapping into state reserves as a potential alternative funding source.

Bipartisan opposition emerges against proposed tax hike for transit funding

Staten Island Borough President Vito Fossella, a co-plaintiff in a lawsuit against congestion pricing, criticized the idea of constant tax hikes and advocated for finding efficiencies. “We have $300 billion combined between the state and city budget,” suggesting efficiencies can be found elsewhere to fund transit said Fossella, “Raising taxes will just hurt businesses more. I just don’t understand it," per New York Post.

Democratic Representative Jerry Nadler, a supporter of congestion pricing, condemned the idea of burdening New York City-focused tax increase. “Our transit system serves twelve New York counties and two other states,” he penned on X. “It’s completely unacceptable for the burden of yet another payroll tax increase to be raised on NYC small businesses to fund regional transit projects.”

Kathryn Wylde, president and CEO of the Partnership for NYC, shared her "frustration and disappointment" directly with Hochul. Her organization later issued a statement against increasing the payroll mobility tax, arguing that businesses and real estate already account for 44% of MTA revenues. This, they contend, places an unfair burden on New York City, which is already the most highly taxed city in the nation.

“Congestion pricing spread the MTA funding burden equitably across all the constituencies that benefit from the mass transit system that supports the tri-state regional economy,” the statement claimed. “The PMT burden is entirely on New York City, which is already the most highly taxed city in the country.”

Tax hike proposal controversy garners Internet reactions 

A user tweeted, "Born & raised in NY. I so miss our weekend trips to Chinatown & Broadway. Sad that my Grandchildren will never know how great it once was."

Another added, "They are broke. They need your money so they can give it to the migrants."

"Maybe the tax base would be large enough if they didn’t drive anyone with a sense of self preservation out of the city. Just a thought," a third said. 

"Hochul is an insulting joke," mocked another. "Government always gets their slice of the pie," remarked a user.

"Stop supporting the migrants. Crack down on fare evasion. Problem solved!!" said a user.

This article contains remarks made on the Internet by individual people and organizations. MEAWW cannot confirm them independently and does not support claims or opinions being made online.