Traffic congestion in New York City showcasing the need for congestion pricing.
New York City’s Central Business District Tolling Program is facing potential legal hurdles as federal prosecutors advise against its termination. Concerns have been raised regarding the rationale behind claims of ‘cordon pricing’ and whether they can withstand scrutiny in court. The prosecutors recommend the Department of Transportation shift focus to changes in agency priorities rather than statutory ineligibility, as legal proceedings surrounding the program’s future continue.
In the hustle and bustle of New York City, the Central Business District Tolling Program (CBDTP) is at the center of a looming legal showdown. Federal prosecutors have recently sounded the alarm, advising the U.S. Department of Transportation (DOT) about serious legal risks as the agency considers pulling the plug on this innovative program.
A letter penned by Assistant U.S. Attorneys has raised some eyebrows. It points out that the reasoning put forth by Transportation Secretary for the termination may not pass the legal test in court. The letter, dated April 11, 2025, suggests that instead of making a legal case against the CBDTP on claims of “cordon pricing”, which Secretary Duffy frames as merely a money grab, there might be better ways to approach the situation.
The prosecutors have indicated that a more prudent strategy would revolve around Office of Management and Budget (OMB) regulations, which would allow for a shift in policy based on changing priorities within the agency. This approach could bode well for the DOT should the termination face legal scrutiny.
The CBDTP was designed to levy tolls on drivers entering Manhattan’s bustling business center, and it was intended as a solution to alleviate the notorious traffic jams that plague the area. The idea was not just to raise funds, but to manage congestion effectively. However, Secretary Duffy argues that the program is merely a way to generate income rather than serve its intended purpose of traffic management.
But here’s where it gets interesting—the prosecutors believe that courts might not agree with Duffy’s narrow interpretation. They argue that terms like “value pricing” and “congestion pricing” should be understood more broadly, in line with Congress’s vision when they established the Value Pricing Pilot Program. This could mean that the CBDTP’s tolling mechanism is more aligned with congressional intent, even if the DOT sees it differently.
Instead of solidifying its case against the CBDTP by claiming it is statutorily ineligible, the prosecutors recommend that the DOT highlight a shift in agency priorities as the main justification for termination. This strategy could offer the department stronger legal footing against potential challenges that could arise, such as allegations of procedural violations or arbitrary decision-making under the Administrative Procedure Act.
The letter from prosecutors also points out that adhering to OMB regulations could align with arguments made by previous plaintiffs in the ongoing legal battles. These arguments suggest that any termination should abide by established cooperative agreement rules, reducing the risk of backlash.
However, the stakes are high. Defending Secretary Duffy’s position in a courtroom setting risks resulting in unfavorable outcomes, which could include vacatur or remand. Such a scenario may create a poor administrative record, exposing the DOT officials to intense scrutiny and discovery related to their decision-making process.
Interestingly, Secretary Duffy’s communications indicated a looming deadline for compliance—April 20, 2025—after the Federal Highway Administration (FHWA) revoked pilot approval for the CBDTP. Meanwhile, New York’s Governor has come out swinging for the program, asserting its legality and highlighting its benefits, including improved business conditions and reduced congestion.
With the future of the CBDTP hanging in the balance, legal proceedings are already in motion to determine its fate, with court filings expected to continue into October. The situation is exacerbated by the DOT’s threats to halt nonessential construction projects in Manhattan should the program not come to a halt.
On a more optimistic note, February 2025 saw New York’s MTA rake in over $51 million in tolls, showcasing the financial viability of the congestion pricing program, which is historic as the first of its kind in the United States.
As NYC braces itself for what comes next, the debate continues: Is the CBDTP a smart strategy for reducing gridlock, or is it merely a revenue source? Only time—and the courts—will tell.
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