Attorney General James and Governor Hochul Sue to Restore $73 Million in Federal Highway Funds for New York

NEW YORK – New York Attorney General Letitia James and Governor Kathy Hochul today sued to block the federal government's unlawful cancellation of more than $73 million in highway funding for New York. Last week, the U.S. Department of Transportation (DOT) announced it would withhold the funding after New York refused DOT’s demands to revoke certain driver's licenses, all of which were issued in full compliance with state and federal regulations. Attorney General James argues that the funding action is illegal and puts New Yorkers at risk, and is seeking to restore the full funding to the state.

“New Yorkers depend on safe, reliable roads and bridges to get to work, take their kids to school, and keep our economy moving. The administration cannot promise funding to our state and then abruptly yank it away,” said Attorney General James. “By cancelling this funding, the federal government is putting jobs and communities at risk. New Yorkers are counting on these investments, and we will not let the president jeopardize our communities’ safety. My office is taking this administration to court to ensure New York gets every dollar it is owed.” 

“Once again, New York is facing devastating federal cuts for nothing more than political payback. Here's the truth: New York has always followed federal rules when issuing CDLs, something even the previous Trump Administration verified year after year,” said Governor Hochul. “Ripping away money that goes towards critical safety upgrades on our roads is reckless and it is illegal. Standing with Attorney General James, we will fight - and win - in court to restore this funding and ensure that our roads are safe for millions of New Yorkers who rely on them.” 

For months, DOT has attempted to pressure New York to revoke certain lawfully-issued Commercial Driver’s Licenses (CDLs) held by certain non-citizen drivers. On April 16, the agency announced it would block more than $73.5 million in federal highway funding already approved for New York and threatened to annually withhold an additional $147 million in future years. New York issues CDLs in compliance with state and federal requirements; all drivers must have legal immigration status and meet strict testing and safety standards to qualify for a CDL. Revoking these licenses would disrupt key industries that rely on commercial drivers and could lead to bus driver shortages affecting schools and families.

Attorney General James argues that DOT’s action is unlawful and based on a new, unsupported interpretation of its own longstanding regulations. For years, New York has issued CDLs in full compliance with federal law, as confirmed in DOT's own reviews. Attorney General James contends that DOT’s sudden shift is arbitrary and capricious, exceeds the agency’s authority, and unlawfully attempts to coerce New York into canceling thousands of validly issued licenses by threatening critical funding. 

New York's highway funding is allocated through federal programs established by Congress to support road maintenance, safety improvements, and infrastructure upgrades. Losing this funding could delay or cancel critical transportation projects, increase costs, and harm local economies across the state.

Federal law dictates that any challenges to final agency decisions from DOT must be filed in a U.S. Circuit Court. Attorney General James today filed a petition for review in the U.S. Court of Appeals for the Second Circuit, asking the court to overturn DOT's decision and restore the funding to New York. Attorney General James and Governor Hochul will also file a motion to expedite the case to secure a decision before the funding is disrupted.