'Just too unstable': Kevin O’Leary slams this blue state's new 'congestion tax' — warns of 'very inflationary' consequences
It’s no secret that “Shark Tank” star Kevin O’Leary is not a fan of New York. He recently called the Empire State a “mega loser state” following the civil fraud case verdict involving former U.S. President Donald Trump.
And now, O’Leary is specifically targeting New York City, which is poised to become the first U.S. city to implement congestion tolls. Set to begin in mid-June 2024, the city will charge a daily toll of $15 for passenger vehicles entering Manhattan south of 60th Street. Trucks will be charged between $24 and $36, depending on size.
During an interview with Fox Business, O’Leary expressed strong criticism towards this new initiative, pointing to its consequences in other regions.
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“Congestion tax has been placed in London, England as well. It proved to be very inflationary in the cost of doing business in the city,” he said. “It changed the nature of who comes into the city. It changed the nature of real estate where parking was and now isn't, all kinds of things changed over the three years since they implemented it but it's there and it's inflationary. Same thing is going to happen in New York.”
According to the Metropolitan Transportation Authority Board, which posted on X (formerly known as Twitter), the program “will reduce traffic in Manhattan's central business district, reduce pollution, and provide critical funding for transit improvements.”
Institutional capital
O’Leary also commented on New York’s ruling against Trump, following the reduction of the bond to $175 million.
He emphasized that personal opinions on Trump, whether favorable or unfavorable, have become secondary. What matters more, he suggested, is the confidence and trust in the “American system,” which is crucial for attracting significant investments.
O'Leary used a real estate scenario to highlight New York's diminishing appeal to institutional investors.
“If you look at the money being raised for real estate internationally, the fastest growing pool of funds is in data centers, because everybody knows AI needs these data centers,” he explained. “So the average size of these funds is $5 billion.”
He highlighted that New York is missing out on this competitive opportunity, and stated, “I don't know of a single data center project being looked at right now in New York state even though they should have won because of low power costs in upstate New York, drawn off Niagara Falls hydro. Nothing there.”
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‘Unstable’ policy
Ultimately, O'Leary believes that the absence of a stable policy environment in New York is what keeps institutional capital on the sidelines.
“It's just too unstable right now,” he said.
O'Leary recommended the adoption of stable policies to restore New York's attractiveness to investors, stating, “You need a governor and a senator to assure you that when you're sinking $3 billion into their state, that it's stable. Do you understand the tax policy? You understand the permitting? You understand the cost of power?”
He cited Montana, Oklahoma, North Dakota, West Virginia and Texas as states exemplifying effective policies — arguing these are the ones attracting data center investments.
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