When Secretary of Transportation Sean Duffy canceled New York City’s congestion-pricing program, he noted that it seemed more designed to fund the Metropolitan Transportation Authority’s spending plans than to address traffic-congestion worries. Duffy was right that New York politicians mainly saw the policy as another way to spread money around. In particular, it demonstrated New York’s fixation on funding race- and sex-based patronage schemes.
In recent years, both the MTA and New York City have pursued a vast diversity agenda for government contractors that does nothing except encourage waste. The program is actively undermining New Yorkers’ reasonable desire for speedy, efficient, and reliable transportation. Minority contracting requirements burdened congestion pricing from the start. In 2019, the MTA awarded the original $500 million contract to set up and run the system to Transcore, a Nashville-based company that is not minority-owned. But the MTA’s Department of Diversity and Civil Rights required that 20 percent of TransCore’s spending go to subcontractors classified as minority- and women-owned business enterprises (MWBEs). In 2023, when the MTA advertised a contract for back-office support for its tolling programs, which would include the future congestion-pricing plan, it established an even higher MWBE spending goal of 30 percent.
The MTA has promised to expand these preferences. Last year, the authority signed the “Equity in Infrastructure Project” pledge, promoted by the Biden administration. The pledge asks public agencies to spend more of their contracting dollars with MWBEs, even if those businesses don’t provide the best service at the lowest price. The MTA bragged that 37 percent of its contract spending went to MWBEs in 2023—over $800 million a year, with nearly $400 million more going to similar “disadvantaged” businesses.
The congestion-pricing funds were supposed to go to the MTA’s long-term capital plan, which promises to “support an inclusive and equitable economy” by awarding billions of dollars in new contracts to minority and disadvantaged businesses. That includes pushing deals with supposedly needy MWBE bond underwriters and asset-fund managers. These are part of the MTA’s effort to make itself what it calls an “engine of equity.” As part of its climate agenda, the MTA also hopes to spend $1 billion to electrify its bus fleet, with an emphasis on directing the funds to “environmental justice communities.”
Abundant evidence shows that minority contracting requirements drive up costs while doing nothing to help the truly disadvantaged. A recent study found that every 10-percentage-point rise in spending goals for “disadvantaged” companies was associated with 25 percent higher project costs—borne, ultimately, by taxpayers.
Despite legal and political pushback on minority-contracting programs in recent years, local politicians continue to expand their use. New York City transportation commissioner Ydanis Rodriguez recently told Governing that one of the “items that I open every meeting with is checking with everyone on how we’re doing with the MWBEs.”
New York City’s transportation department has taken advantage of a state law promoted by Mayor Eric Adams and signed by Governor Kathy Hochul that lets the city offer contracts worth up to $1.5 million to MWBEs without a formal bidding process. Carlos Bannister, the transportation department’s chief contracting diversity officer, noted how he gets around the letter of the law to offer even more such contracts: “The term we use is ‘debundling,’” he told Governing. That means department officials “debundle the large contracts to take advantage of the MWBE small-purchase method.” Bannister is just one of 45 chief officers focused on contracting diversity in New York City government.
Local commuters don’t care about the skin color or sex of those earning money from their travel. They only want their tax dollars to be put to good use. Until New York politicians understand that, they won’t improve transportation in the city.
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