New York officials face backlash over 'congestion' tax push

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New York Gov. Andrew Cuomo blames the Trump administration's tax reforms for his states $2.3 billion budget deficit

New York State is facing a $2.3 billion budget deficit, and Gov. Andrew Cuomo believes it's largely due to the Trump administration's tax reforms which, on the flip side, have taxed the rich and may be encouraging wealthy residents to leave.

New York City is expensive. From parking to hotels to Broadway tickets, the city has a way of leaving the wallet lighter for any visitor. But it’s poised to get even pricier if a controversial new “congestion” fee comes to fruition.

With Democratic Gov. Andrew Cuomo’s backing, the proposed charge would be imposed at all Manhattan points of entry below 60th Street. While the price has not been set in stone, a report commissioned by Cuomo’s office recommends cars entering Manhattan during peak hours be charged $11.52, and trucks be charged $25.34 – on top of any bridge tolls.

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The hope is that the fees eventually would help ease traffic, while sending needed funds toward public transportation, notably the city’s aging subway system.

But, on the heels of New York’s clash with Amazon that ended with the tech giant scrapping plans for a new headquarters there, the proposal is creating new economic concerns and political pushback.

Democratic state Sen. Joseph Addabbo, who represents parts of Queens and Brooklyn, told Fox News that “businesses are very concerned” about the higher costs of entering Manhattan.

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“Being a business person in New York City is not easy,” he said. “… Congestion pricing is hitting them over the head.”

Cuomo, in his State of the State address last month, said the fee would raise about $15 billion by 2024. New York City Mayor Bill de Blasio supports the legislation but is calling for hardship exemptions for those traveling to Manhattan for medical care – as well as upstate farmers who sell produce in Manhattan.

Phase one, meanwhile, already has been enacted as New Yorkers riding below 96th Street started seeing increased prices in their taxis, Ubers and other rides for hire since Feb. 1: $2.50 for yellow cabs; $2.75 for Uber, Lyft and Juno; and 75 cents for ridesharing cars. Cuomo reportedly says the Metropolitan Transportation Authority can gain $1 million a day from the new surcharges.

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But in a statement to Fox News, the Independent Drivers Guild representing over 70,000 app-based drivers blasted what it called a “sham” tax that “unjustly singles out low income for-hire drivers and their already highly-taxed riders.” The organization said the system “disproportionately hurts women, who more often opt for Uber or Lyft trips over public transit for safety reasons, especially at night.”

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What comes next is not yet clear. Phase one only went into effect this month after a long legal battle. Phase two, which would extend to all drivers, would have to clear the state legislature – but could be a tough sell since the tax would affect any constituents who travel to the city.

New York City Councilman Barry Grodenchik, a Democrat representing part of Queens, worried about the impact to his constituents, many of whom rely on cars to get into Manhattan.

Leading opponent Richard Brodsky, a former Democratic assemblyman, told The New York Times last year, “This has always been a policy nostrum of the elites, sort of a big lab test in which the lab rats — the regular people — wanted no part of it.”

Supporters counter that the plan can work, and is sorely needed.

A spokesman for New York state Democratic Sen. Liz Kruger, who represents Manhattan’s east side and supports the plan, told Fox News the senator remains optimistic and “the devil is in the details.” Kruger thinks there is “a model that can be found that is equitable to all New Yorkers,” the spokesman said.

Democratic state Sen. Kevin Thomas, of Long Island, stressed the need to fund infrastructure repairs. “Much of my district commutes by train to the city, and improvements are desperately needed to the aging rail line,” he said, urging that most of the money go toward fixing the Long Island Railroad.

In Cuomo’s State of the State address, he said, “The status quo has got to go. Riders are fed up, the situation only gets worse. It's like the old commercial: you can pay me now or you can pay me later. The system is just continuing to deteriorate and if we don't invest now we're going to pay more later and suffer in the meantime. … Let's do it this year.”

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Congestion pricing is not new. London has had an £11.50 surcharge since 2003, during working business hours. Los Angeles, too, is looking at a rush-hour toll system, with support from Democratic Mayor Eric Garcetti.