Congestion pricing paused, business tax proposed: What's next?

Questions after congestion pricing postponed

The day after Governor Kathy Hochul's last-minute postponement of congestion pricing, there are lots of questions about what happens next. Among them, when it will go into effect and where the MTA will get the funding that it was counting on. FOX 5 NY's Morgan McKay has the story.

NEW YORK CITY - Governor Kathy Hochul put an indefinite pause on the implementation of congestion pricing and is proposing another tax on New York City businesses to replace it.

"To those cynics who question my motivation, I approach every decision through one lens: What is best for New Yorkers," Hochul said in her pre-recorded video on Wednesday.

But some of those New Yorkers are out in full force today – criticizing the Governor’s out of the blue 11th hour flip on congestion pricing that would have charged many drivers entering Manhattan below 60th street around $15 a day – generating billions for the MTA while reducing congestion.

Hochul, in her pre-taped video that did not allow reporters to ask questions – said that there is a pot of money she set aside to backstop the MTA plan that budgeted for billions of dollars worth of capital projects – but those like Senate Finance Chair Liz Krueger are questioning where this money Hochul claims to have lying around is coming from.

WATCH: Hochul's congestion pricing announcement

NYC's congestion pricing plan will be indefinitely paused, New York Gov. Kathy Hochul said in an announcement Wednesday.

"We just finished a budget, this was not discussed in the context of the budget," Senator Krueger said. "She just went to the Vatican to talk about her commitment to climate change. I don't think this was part of the discussion with the Pope."

At the end of the day – the MTA is now facing a fiscal cliff and the state now needs to find a way to fill this budget hole for at least this year.

According to numerous sources, Hochul is now trying to pressure the state legislature to increase taxes on businesses – even though there are 24 hours left of the legislative year.

According to one source who sat through one of these closed-door meetings – the proposal went over like a "lead balloon."

Lawmakers are "extremely upset", the source continued, and there is very little appetite to take up this sort of proposal.

A payroll mobility tax would also fly in the face of the goal Hochul outlined on why she is pausing congestion pricing – to help businesses recover post pandemic.

As Andrew Rein from the Citizens Budget Commission explains – lawmakers already hiked the payroll mobility tax last year.

"And it would have no congestion or emission benefits, a terrible substitute and it would actually hurt our economy more," Rein said.

Taking its Toll - Congestion Pricing

A special in-depth look at New York City's controversial congestion pricing plan for Manhattan. The overall plan is moving forward, with tolling set to begin in June. But how did we get here, and what can we expect? FOX 5 NY takes a look.

Many believe the final say of whether or not congestion pricing can be postponed will be up to an MTA board vote later this month – and the MTA seems to be playing along at least for now.

A lawyer for the MTA told a judge overseeing some of the lawsuits against congestion pricing that the June 30th implementation date is no longer happening.

But those like Senator Krueger say that the MTA board should do their job and vote against delaying the program.

"I believe this would be a violation of the law for the MTA board to give her the vote she's asking for," Krueger said. "I've been speaking to MTA Board members, urging them to vote no."

The MTA still has not released a public statement or comment about the "indefinite delay" to congestion pricing.