(Bloomberg) -- A plan to charge motorists driving into New York City’s midtown Manhattan received final federal approval, according to a notice to US congressional members, a significant step that allows the first such tolling program in the US to roll out.
The Federal Highway Administration on Friday determined that an environmental review of the new initiative, called congestion pricing, had no significant impacts, according to a notice sent to Congressional members that was obtained by Bloomberg News. That approval was needed before construction on the tolling could begin.
The Metropolitan Transportation Authority, which operates New York City’s subways, buses and commuter rails is responsible for implementing the program. The FHWA will begin negotiating a tolling schedule with New York officials, according to the notice.
Drivers may begin paying the new charge as soon as April 2024. E-ZPass motorists driving south of 60th Street, the city’s central business district, may pay as much as $23 to enter the area.
The purpose of congestion pricing is to raise $1 billion of new annual revenue for the MTA, reduce traffic and pollution, while boosting mass-transit ridership. The revenue will help finance capital projects like extending the Second Avenue Subway to Harlem and modernizing signals.
MTA officials anticipate congestion pricing will cut the amount of daily vehicles entering the district by as much as 20%.
Read more: NYC Drivers Face $23-a-Ride Congestion Fee as Soon as April 2024
A six-member Traffic Mobility Review Board will determine the specific tolling structure and discounts or exemptions. E-ZPass drivers may pay as much as $23 during peak hours and $17 during off-peak periods.
The plan will include discounts and state tax credits for some lower-income drivers. Passenger cars, taxis and for-hire vehicles would only be charged once a day.
Read more: What Congestion Pricing’s Arrival in NYC Will Mean: QuickTake
New York Governor Kathy Hochul supports congestion pricing, but it does face pushback from New Jersey politicians as many of their constituents will be paying the new toll.
US Senator Bob Menendez, and US Representatives Josh Gottheimer and Bill Pascrell said the program should undergo a full environmental review rather than the shorter assessment it received.
“This is nothing more than a cash grab to fund the MTA,” the three lawmakers said in a statement Monday. “There is no excuse for FHWA and the Department of Transportation’s failure to require New York to meaningfully engage with stakeholders across New Jersey and to not adequately consult the New Jersey congressional delegation and other elected officials.”
New Jersey Governor Phil Murphy is reviewing all legal options to halt the plan after failing to persuade the federal government to re-evaluate the tolling initiative’s environmental assessment. Murphy has said the plan will increase traffic and pollution in New Jersey and force his residents to finance MTA’s funding woes.
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