City Hall and the New York State Assembly may be headed to the biggest showdown since Aaron Burr and Alexander Hamilton met on the dueling grounds at Weehawken (crossing the river back then was free but you had to use a row boat). Erik Engquist and Anne Michaud report in today’s Crain’s Insider:

MAYOR MICHAEL BLOOMBERG didn’t seem to be in the mood to compromise on his congestion pricing plan when he told a Crain’s forum late last month that the Legislature shouldn’t be "micromanaging" his proposal. But members of the Assembly aren’t ready to give way.

Some Assembly Democrats want to reduce the area covered by the fees; in PlaNYC 2030, the mayor proposed that vehicles be charged below 86th Street. Assembly members also want to cut the hours that fees are in effect; the mayor’s proposal would levy the charge between 6 a.m. and 6 p.m. on weekdays.

They also question why New Jersey commuters would pay so little to get into Manhattan. PlaNYC would let drivers deduct bridge and tunnel tolls from the $8-per-car charge. For example, after paying the $6 eastbound Lincoln Tunnel toll, they would pay only a $2 fee.

Charging the full $8 would increase annual revenue from congestion pricing to $1 billion, says one ranking Assembly member. But the move would draw opposition from New Jersey Gov. Jon Corzine.

The Assembly’s desire to negotiate changes is sure to lead to a showdown. City Hall is facing an early August deadline to qualify for federal funds.