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3/31/2008
New York: Congestion Tax to Hit Motorists Hard
Pending New York City, New York congestion tax vote could impose new expenses on motorists.

Mayor Michael Bloomberg
New York City Mayor Michael Bloomberg (I) is furiously lobbying New York state legislators and city council members to pass his congestion tax proposal as early as today. Compromise legislative language was hammered out over the weekend to meet specific desires of individual lawmakers and secure their assent in what is expected to be a very close vote. The net effect of the changes to the plan will increase the financial burden of the tax on drivers.

"The city shall... increase fees for on-street parking in parking meter zones within the congestion pricing zone," the latest text of Senate Bill 7243 states.

Most city-owned vehicles, buses, cars with diplomatic plates, taxis and vehicles with New York City handicapped stickers will be exempt from the charge. The tax starts by hitting those traveling by taxi within the congestion zone who will pay a new $1 per trip fee. The remaining motorists will initially pay a $8 tax for cars and $21 for trucks, but those who do not sign up in advance for E-ZPass will pay $9 and $22, respectively, to enter Manhattan during business hours. Anyone accused by new photo monitoring cameras of failure to pay the tax within 96 hours of entering the zone will be hit with a $75 ticket. If the vehicle owner does not receive the ticket in the mail, the cost can grow to a maximum $140 per instance. Thousands of motorists across the country have been wrongly accused of cheating by miscalibrated toll transponder equipment and violation detectors that misread license plates. Individuals whose credit card numbers expired found these "penalty" notices quickly grew into bills exceeding $10,000.

The experience of London, upon which Bloomberg based his plan, has shown that these "late payment" fines account for the majority of profit for the congestion tax. The tax itself is used to pay the multi-million contract of private vendors that operate the complex vehicle tracking and taxing system. London's tax, like New York's, started at $8 per day. But London's tax quickly grew to a maximum of $50 per day for certain family vehicles.

Another new provision of Bloomberg's proposed law creates a reimbursement option for drivers that qualify to receive the federal earned income tax credit. At the initial rates, drivers can receive a tax refund of up to $79 per month according to a complicated formula that takes the amount of congestion tax paid in 30 days and subtracts the cost of a 30-day metrocard (currently $81). The legislation will also increase fees on the Port Authority by $1 billion so that the agency will increase taxes on New Jersey commuters.

One pro-motorist provision creates an anonymous payment option that will allow drivers to use cash to recharge their E-ZPass account. This affords some privacy, although all vehicles entering the city will continue to be photographed and tracked.



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