NY lawmakers considering $1B IOU after Gov. Hochul’s congestion pricing flip-flop

State lawmakers on Thursday rejected New York Gov. Kathy Hochul’s behind-the-scenes push for a tax hike to fill a gap in the MTA’s budget after she abruptly abandoned a soon-to-take-effect toll on drivers in part of Manhattan.

Now, they’ve turned their focus to an IOU.

The state Legislature extended its annual session into Friday to deal with the Hochul-created financial crisis for the MTA, which was counting on $1 billion annually from the long-planned congestion pricing toll. The plan was set to go into effect at the end of the month and would have allowed the MTA to borrow money to pay for improvements to subway stations and other transit infrastructure.

Hochul has not appeared in public or taken questions from the press since she scuttled the toll plan on Wednesday, citing the economic burden of a $15 base toll at a time when the city is still adjusting to post-pandemic life. But behind the scenes, lawmakers say she was pushing a measure to hike an existing payroll tax for some New York City businesses, which already helps fund the MTA.

The Democratic majorities in the Senate and Assembly rejected that measure after a number of closed-door huddles Wednesday and Thursday.

By late Thursday night, Hochul and lawmakers honed in on a different proposal: A yet-to-be-introduced measure that would commit the state to providing $1 billion to the MTA, without identifying a specific funding source.

At around 11 p.m., Senate Deputy Majority Leader Michael Gianaris (D-Queens) told reporters that senators were trying to determine what that would mean for the MTA’s ability to enter the bond market and keep its infrastructure projects on track.

“I think (the emerging proposal is) very simply something that just says there will be a billion dollars for the MTA in the following year’s budget, but without any specifics as to what that means,” Senate Deputy Majority Leader Michael Gianaris (D-Queens) told reporters around 11 p.m., according to a video from Spectrum News NY1.

The Legislature had been scheduled to end its 2024 schedule on Thursday. Now, both houses are planning to go well into Friday night and possibly into Saturday, as well. Lawmakers aren’t set to return to the Capitol until the 2025 session in January, when they would face significant pressure to identify a recurring revenue stream for the MTA.

Betsy Plum, executive director of the Riders Alliance, a nonprofit organization that advocates for transit riders, said lawmakers “must not compound Governor Hochul’s betrayal of millions of public transit riders.”

“The proposal on the table will not fix the subway,” Plum said in a statement. “A billion dollar IOU is not nearly enough money nor is it nearly secure enough to build trust and rebuild our critical infrastructure.”