Everett Collection Inc / Alamy Stock Photo

Invest in Transit the Right Way

Alon Levy

May 01, 2024

How to spend congestion pricing cash to improve subways and buses

How to spend congestion pricing cash to improve subways and buses

New York finally passed congestion pricing; the charges are officially expected to generate $1 billion in annual revenue for the MTA. Now comes the time to govern with it. The MTA will certainly get more money, supplementing its current budget of about $30 billion, including $11 billion a year in capital plus $19 billion in operations. It should also benefit from higher revenue coming from passengers switching from driving to taking the commuter rail and subway, and from higher bus speeds and reliability in Manhattan.

But no one should fool themselves; the extra cash won’t be the difference between a dystopian “Escape from New York” future and nirvana. The MTA’s poor reputation when it comes to spending money — many people know about “the most expensive mile of subway track on Earth” — means that to win public trust, it will need to showcase visible improvements in capital spending and operations in the next decade or so. Most of those improvements will have to come from existing funding sources, since the $1 billion in extra revenue is only 3% of the current combined budget. Whatever happens, the general public will judge the success of congestion pricing not by which program gets extra money with a “funded by congestion pricing” sticker slapped on it, but by whether the overall quality of mass transit improves. 

Thus, congestion pricing is best viewed as a way to make it somewhat easier for the MTA to conduct a modernization program, providing a modicum of extra revenue and extra ridership diverted from cars to fund it. On the capital side, this means the agency must continue to find cost savings through more efficient designs and spend the money on visible improvements, including new lines, faster service and station accessibility. On the operations side, improvements can use the expected speed boost from reduced congestion to build up a bus modernization program; the most pressing improvements do not require more spending, but do require managers to be more willing to expand service and let higher ridership pay for it.

Accessibility and other improvements

The MTA’s current capital program has a five-year budget of $55 billion. That means, on current estimates, congestion pricing revenues stand to augment future capital programs by a little less than 10%. The most important lesson from this is that the MTA will be judged based on its ability to deliver projects that make a difference to those who use the system regardless of the extra money. It won’t do if there are a handful of shiny new subway lines while the rest of the system is left to rot. In London, there has been little expansion of the Underground since congestion pricing was enacted in 2003, but there have been significant visible improvements in operations.

For example, London Underground frequency is high, as is reliability. Lines run every three to five minutes off-peak. In New York, Riders Alliance has called on the MTA to deliver six-minute frequencies on all subway routes all day, which analysis by the Effective Transit Alliance indicates would not require additional funds, just a paradigm shift in planning toward better off-peak service. 

Working on speeding up the trains would be useful. The reduction in subway speeds in the 2010s led to ridership decreases, which former transit boss Andy Byford famously began to tackle with his plan, Save Safe Seconds. Trip times fell, but not to their 20th-century levels; further improvements are required. This is mainly a matter of maintenance standards and work zone speed restrictions, and should not cost money in the long run, but MTA managers and politicians always worry that service expansion is too costly. Congestion pricing could help, not through providing more money (it is not necessary for higher speeds or frequencies) but by giving politicians some peace of mind that if it does require more money, congestion pricing will provide additional revenue.

One place where both New York and London fail is accessibility: Only about 30% of the New York City subway’s stations are wheelchair-accessible, and current MTA plans only call for 95% accessibility to be reached in the 2050s. The London Underground is only marginally better. Both are far behind nearly every other major American, European or Asian subway system. For example, the Berlin U-Bahn, an even older subway system than New York’s, is 83% accessible, and will soon reach 100%. It’s imperative to both direct some extra MTA capital funds in this direction and ensure adequate cost control.

Capital funding and construction costs

The construction costs in New York are infamously high, as we documented in the Transit Costs Project (and in this article for Vital City by my colleague Eric Goldwyn). The good news is that there are some signs that the MTA is implementing one of our findings: Second Avenue Subway Phase One’s station caverns were twice as long as the train platforms, with the extra length going to unnecessary back-of-the-house space, whereas comparable European projects have digs only 3-15% longer than the platforms. The MTA recently announced that the extra length for the Second Avenue Subway Phase Two stations would shrink from about 100% longer than the platforms to about 40% longer than the platforms, saving $1 billion out of the project's $7 billion budget. We expect that if future subway extensions are designed with right-sized platforms from the start, their costs will be halved, rather than reduced by just one-seventh: Such future designs will be able to reduce the station footprint even further, and not have 20 years of design and engineering around larger footprints already baked in.

With both congestion pricing money coming in and a cost saving on Second Avenue Subway Phase Two that portends larger savings in the future, the MTA can and should plan around some additional extensions. If planning begins now, construction begins in the late 2020s and lines open in the 2030s, it will increase long-term confidence in the MTA’s ability to build. More than that, some of this confidence can accrue to the MTA in the next few years, if people see it credibly commit to lower cost figures for subway extensions than the region is used to from the Second Avenue Subway.

Right now, the Interborough Express, or IBX, is the next anticipated line. It is to run on a little-used freight run-of-way, connecting Bay Ridge, Brooklyn College, Broadway Junction, and Jackson Heights, with plenty of subway transfers on the way. Using preexisting infrastructure cleverly makes it a good project, but precisely because it does so with little to no new tunneling, it is not the best place to demonstrate that the MTA can build. Instead, it is best to look at the next few subway extensions that area advocates are most excited about. Gov. Kathy Hochul recently floated a trial balloon about a 125th Street crosstown line, tying into Second Avenue Subway Phase Two. Advocates have also long wanted subway extensions on Nostrand and Utica Avenues in Brooklyn, two lines that were promised to be built right after the Second Avenue Subway in the 1970s. These two lines are not currently studied, but would be good additions as well, paralleling two of the top 10 bus corridors in the city, in some of the densest areas that do not have subway service.

Bus operations

In London, after congestion pricing was implemented, bus speeds rose 7% in the congestion charge zone and 2% near it, and bus ridership into city center rose 18%. Far from the congestion charge zone, there was no increase in bus speeds.

Nonetheless, New York City Transit can expect to see a bump in bus speeds in Manhattan. The costs of bus operations, dominated by the wages of the bus drivers, scale with service hours; if speeds increase, then more service is provided for the same cost. But most likely, the increase in service will not be within the Manhattan core, where very few people drive to begin with. Rather, the extra resources should be used to boost bus service outside Manhattan, connecting to subway lines that will soon begin to take passengers who previously drove. A modest share of the money, $12 million a year, is being allocated to increasing service on 20 buses.


The MTA has serious problems with operations and capital planning; congestion pricing is one tool that could help alleviate them. In one sense, it is good in itself, since the congestion charge is very likely to induce passengers to drive less and take transit more, and by the same token leave the streets clearer of cars so that buses can run faster. The reduction in the number of cars also stands to make the city a nicer place to live in for the majority of the city population that does not own a car, and as the city becomes a better place to live, more people will want to move in and use the subway. But in another sense, it's only part of the beginning of the solution: The MTA has extensive investment needs ahead of it, and while congestion pricing money can help make the system better to an extent, it's more important to ensure that the money is spent wisely and effectively. People in 10 years can see a failed city in which yet another major MTA investment drive was wasted, or they can see a successful city with less congestion and pollution and visible improvements in mass transit.