New Jersey sues to block New York City’s congestion pricing plan

New Jersey sued the federal government Friday to block New York’s plan to add tolls on Manhattan’s busiest roads, calling it a “misguided scheme” that will reap billions for the city while spiking congestion and air pollution in New Jersey.

In a federal complaint filed in Newark, state officials asked the court to vacate the final approval the U.S. Federal Highway Administration gave the Metropolitan Transportation Authority’s congestion pricing plan last month and order a “full and proper” environmental impact review, as federal law requires.

Gov. Phil Murphy and other state and federal officials gathered in Fort Lee Friday morning to condemn the first-in-the-nation congestion pricing plan, which could cost a full-time commuter who drives anywhere south of Central Park an extra $6,000 a year. That would add up to $15 billion for the MTA.

Drivers looking to dodge that cost will resort to “toll shopping,” seeking circuitous routes to avoid areas where congestion pricing applies and creating more traffic and pollution in New Jersey, especially in Bergen County, Murphy said. The most impacted areas likely will be around the Lincoln Tunnel, Holland Tunnel, George Washington Bridge, Goethals Bridge, and Outerbridge Crossing, the lawsuit states.

“This massive increase in tolls would mean hundreds of dollars a month for families that need that money for essentials. And the environmental cost is anathema to our shared obligation to protecting vulnerable communities from hazardous air quality,” Murphy said. “The bottom line is that we have to put our foot down to protect New Jerseyans.”

The complaint names as defendants the Federal Highway Administration; its administrator, Shailen Bhatt; its New York division administrator, Richard J. Marquis; and the U.S. Department of Transportation. It doesn’t name the MTA as a defendant, Murphy noted, because MTA officials haven’t decided which of seven possible congestion pricing “scenarios” they will adopt. The scenarios have different toll fees, hours, and exemptions.

New Jersey officials say they are especially irked by the Federal Highway Administration’s “inexplicable finding” that a full environmental impact statement isn’t necessary because the congestion pricing plan would “have no significant impact on the human or natural environment.” The agency “abrogated its legal responsibility” by skipping such a comprehensive environmental review, which the National Environmental Policy Act requires, the state said in its lawsuit.

“Nothing in this bedrock federal environmental law allows the FHWA to turn a blind eye to the significant environmental impacts that congestion pricing in the Manhattan Central Business District will have on New Jersey, favoring New York at the expense of its neighbors,” the lawsuit states. “There is no excuse for the FHWA’s fundamentally flawed and improperly truncated decision-making process that failed to consider critical issues requiring a full environmental review.”

The MTA expects the Bronx’s air quality to be so impacted by congestion pricing it has earmarked $130 million for mitigation efforts, the lawsuit notes.

The agency also agreed to allocate 10% of congestion pricing funds to the Long Island Rail Road and Metro-North Railroad each, but nothing to New Jersey’s transit agencies, even though more than 400,000 Garden State residents commute into Manhattan daily, according to the complaint.

Critics who joined Murphy to denounce the congestion pricing plan accused the MTA of trying to fix its fiscal woes on the backs of New Jersey’s middle class.

“I want to thank the governor for punching back at a state that decided to use Jersey as their piggy bank to solve their years of criminal mismanagement at the MTA, the worst run mass transit system in the entire nation,” U.S. Rep. Josh Gottheimer (D-05) said. “For the MTA, it’s just a cash grab. They have a $3 billion budget deficit caused by their willful mismanagement. They lost $700 million last year to fare-skippers alone — people who just decided to ride and not pay. So they need Jersey to pour our hard-earned dollars into their bottomless black pit over there.”

Sen. Bob Menendez, also a Democrat, called the plan “a tax shakedown, a slap in the face to the fundamental idea of democracy and fairness between our two states.” He said he has introduced federal legislation that would cut half of New York’s federal highway funds if officials there “barge ahead with their misguided plan.”

A “baseless” lawsuit?

Spokespeople for Gov. Kathy Hochul didn’t respond to a request for comment.

But John J. McCarthy, the MTA’s chief of external relations, called New Jersey’s lawsuit “baseless” and Murphy’s news conference a “pro-traffic rally.”

He disputed New Jersey’s claim there was insufficient study of the plan’s environmental impact, saying the MTA and New York state and city transportation officials did a 4,000-page environmental assessment that was “supervised at every stage and specifically approved by the Biden administration.”

That assessment “covered every conceivable potential traffic, air quality, social and economic effect, and also reviewed and responded to more than 80,000 comments and submissions,” McCarthy said in a statement.

He also pushed back on New Jersey’s complaint that Garden State policymakers and residents didn’t get enough opportunities to weigh in on the plan.

“Not only were there six public hearings lasting a total of 38 hours, there were 19 outreach sessions, in which dozens of officials from New Jersey agencies participated,” McCarthy said. “We’re confident the federal approval — and the entire process — will stand up to scrutiny.”

McCarthy wasn’t the lawsuit’s only critic. About a dozen environmental activists rallied outside Murphy’s news conference Friday, urging the governor to stop fighting New York’s congestion pricing plan and focus instead on implementing strong climate policy in New Jersey.

Specifically, they called on New Jersey officials to fully fund NJ Transit, reject NJ Transit’s plans to build a gas-burning power plant in Kearny, and abandon plans to widen the New Jersey Turnpike in Hudson County.

“Investing in sustainable public transit and embracing forward-thinking policies like congestion pricing will propel us towards a greener, more equitable future,” Tri-State Transportation Campaign’s executive director, Renae Reynolds, said in a statement.

Targeting other “unfair taxation”

At the same news conference, Murphy signed bipartisan legislation he said will help end unfair taxation and discriminatory treatment of New Jersey residents.

The new law will bring New Jersey’s tax code in line with New York’s by allowing the Garden State to tax remote employees who live in other states but work for New Jersey companies, as long as the employee’s home state has a similar tax rule.

It also provides tax credits for New Jersey residents who dispute tax policies imposed on them by other states and creates a $35 million grant program to encourage companies that primarily operate outside the state to properly assign their employees that live in New Jersey and to open offices here.

“New Jersey workers deserve to see their tax dollars come back and benefit their communities, not New York’s,” said Assemblywoman Lisa Swain (D-Bergen), one of the bill’s prime sponsors. “We will not stop fighting for parity among our neighboring states when it comes to tax structure and commuting costs.”