New York Construction Report staff writer
New York Governor Kathy Hochul and New York Attorney General Letitia James have filed a lawsuit challenging the federal government’s decision to cancel more than $73 million in highway infrastructure funding for the state, escalating a dispute over Commercial Driver’s Licenses (CDLs) and federal transportation policy.
The legal action, filed in the U.S. Court of Appeals for the Second Circuit, seeks to block the U.S. Department of Transportation (DOT) from withholding the funding after the agency announced it would do so following New York’s refusal to revoke certain lawfully issued CDLs.
The state argues the licenses were issued in full compliance with both state and federal requirements.
“Once again, New York is facing devastating federal cuts for nothing more than political payback,” Governor Hochul said. “New York has always followed federal rules when issuing CDLs, something even the previous Trump Administration verified year after year. 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.”
Letitia James also criticized the funding cancellation, arguing it puts essential infrastructure projects and public safety at risk.
“New Yorkers depend on safe, reliable roads and bridges to get to work, take their kids to school, and keep our economy moving,” James said. “The administration cannot promise funding to our state and then abruptly yank it away. By cancelling this funding, the federal government is putting jobs and communities at risk.”
According to the state, the dispute stems from months of pressure by the U.S. Department of Transportation, which has urged New York to revoke certain CDLs issued to non-citizen drivers. On April 16, the agency announced it would block more than $73.5 million in already approved federal highway funding and warned that up to $147 million annually could be withheld in future years.
New York officials maintain that all CDL holders meet legal immigration status requirements and strict federal and state safety standards. They also argue that revoking the licenses would disrupt critical sectors that rely on commercial drivers, including school transportation and freight logistics.
Attorney General James contends the federal government’s action represents a sudden and unsupported change in regulatory interpretation, calling it “arbitrary and capricious” and beyond the agency’s authority. The lawsuit argues that DOT’s move unlawfully coerces the state by conditioning infrastructure funding on changes to licensing practices that have previously been deemed compliant.
Federal highway funding supports road maintenance, safety upgrades, and major infrastructure projects across New York. State officials warn that losing access to the funds could delay or cancel projects and increase long-term costs for taxpayers and municipalities.
The state has also filed a motion to expedite the case, seeking a ruling before the funding disruption takes effect.
