By Marlyn Montilla
New York state officials have sued President Donald Trump’s administration to recover more than $73 million in highway funding in a dispute over noncitizen access to commercial driver’s licenses..
This is one of the latest in several battles between the federal government and New York over transportation, in which courts have repeatedly denied the Republican administration’s attempts to withhold funds due to political disputes.
Popular State Attorney Letitia James and Governor Kathy Hochul filed the lawsuit in federal court on Friday. Both seek to recover funds that the federal Department of Transportation withholds for licenses and permits that, according to what they claim, were issued illegally.
The State alleges that it has committed no wrongdoing and that the licenses in question were issued in accordance with state and federal regulations.
Both James and Hochul said in a press release that revoking licenses would disrupt key sectors and could cause a shortage of bus drivers.
The Department of Transportation stated that an audit by the Federal Motor Carrier Safety Administration (FMCSA), the results of which were published in December of last year, revealed that more than half of the New York licenses reviewed had been issued in violation of federal law.
The Gothamist media reported in February 2026 that Hochul’s administration stopped issuing commercial driver’s licenses to many immigrants after federal threats to withhold funds, causing heavy criticism by transportation unions, Gothamist reported.
However, the Department of Transportation argues that New York remains out of compliance and this April announced that it would withhold $73 million, 4%, of the state’s National Highway Performance Program.
The US Secretary of Transportation, Sean Duffy explained at the time that he held the state responsible for not protecting its residents from “unverified and unqualified foreign drivers.”including issuing eight-year licenses to non-citizen drivers without regard to the expiration date of their legal status.
According to the governor and the well-liked prosecutor, that money goes to road maintenance, safety improvements and infrastructure projects throughout New York. In your statement, you plan to file a motion to expedite the case and avoid any setbacks.
According to James and Hochul, the Federal Department of Transportation threatened to withhold an additional $147 million in future highway funding each year if New York does not comply.
Additionally, state and federal authorities have gone to court over New York City’s congestion pricing rules.
In March, a federal judge declared the Trump administration’s attempt to suspend tolls illegal. The courts also ordered the administration to restore funding for the Second Avenue subway, amid a dispute over what the federal government alleged were illegally awarded “DEI” contracts.as well as the Gateway Hudson Tunnel project.
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• “Contempt for federal security”: New York loses $74 million for leaving licenses to thousands of immigrants with expired documents