Photo Credit: Joiseyshowaa
Times Square traffic jam, July 6, 2011.

New York City is holding public hearings on the plan to impose congestion pricing on drivers in the busy parts of Manhattan. Should the plan be adopted it would make New York the first American city to take such aggressive measures to ease traffic pressure and hazards.

The economic theory behind congestion pricing is that by using the price mechanism, motorists become conscious of the costs they impose on the city when driving on its streets during peak hours and that it’s only fair to ask them to pay for the additional congestion they create. As a result, the theory goes, there would be a redistribution of the demand for city space, as motorists learn through their pocketbooks their impact on the dense urban environment.


The public hearings started last week, and they usher in an extensive review process required by the federal government before the Metropolitan Transportation Authority (MTA) is allowed to start charging vehicles entering Manhattan between 60th Street and Battery Park. The review process will continue through 2023. In the end, the city wants to use the congestion money to improve public transit as well as offer a tax credit for residents who earn less than $60,000.

So far, the cities that charge motorists for the pleasure of entering their crowded downtown areas include London, Stockholm, Singapore, Milan, Gothenburg, Durham, Znojmo in the Czech Republic, and Valletta in Malta.

There are four types of systems in running congestion pricing: a cordoned area around a city center, with charges for passing the cordon line; area-wide congestion pricing, which charges for being inside an area; a city center toll ring, with toll collection surrounding the city; and corridor or single facility congestion pricing, where access to a lane or a facility is priced.

In Israel, in 2008, the government decided to consider imposing a congestion charge and a team was set up to propose a pilot plan. The State Comptroller noted at the time that “the non-application of external costs to users is inefficient and unfair, and means subsidizing the users of private vehicles—for example, some residents of large metropolitan areas—by those who do not use it or who use it on a small scale, such as some residents of the periphery. The subsidy, in this case, is forced on the latter and leads to inefficiency in the use of transportation.”

But the next Transport Minister, Israel Katz (Likud), who served in office from March 2009 until June 2019, did not pay attention to the government decision that required him to examine the option of congestion pricing in the big cities.

In 2021, the Lapid-Bennett arrangement bill included a plan to impose a congestion charge in Gush Dan (Tel Aviv Metro).


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