Transportation Secretary Sean Duffy withholds $73M in federal transportation funds from New York
- U.S. Transportation Secretary Sean Duffy said on April 16 that the Federal Motor Carrier Safety Administration is withholding $73.5 million from New York. - Federal auditors said 107 of 200 sampled non-domiciled commercial driver records violated federal rules, and New York still has nearly 33,000 disputed licenses. - New York sued on April 24, calling the penalty illegal and warning more highway funds could be at risk. (ttnews.com)
Transportation Secretary Sean Duffy said on April 16 that the federal government is withholding $73.5 million in highway funds from New York over truck-driver licensing. (transportation.gov) The U.S. Department of Transportation said New York failed to revoke non-domiciled commercial learner’s permits and commercial driver’s licenses that federal auditors found were issued illegally. The penalty equals 4% of New York’s National Highway Performance Program and Surface Transportation Block Grant funds. (transportation.gov) Federal Motor Carrier Safety Administration auditors reviewed 200 sampled records and said 107 were issued in violation of federal law, a failure rate of more than 53%. The agency also said New York’s system defaulted to eight-year licenses even when a driver’s legal status expired sooner. (transportation.gov) (pbs.org) The dispute centers on non-domiciled commercial licenses, which states can issue to people who are in the United States legally but do not have permanent residency. Federal officials said New York was ordered to review those files and revoke licenses that did not meet federal standards. (pbs.org) The Transportation Department said New York issued 32,606 of these licenses. Duffy has tied the crackdown to a nationwide review launched after an August 2025 Florida crash that killed three people. (pbs.org) (spectrumlocalnews.com) New York has rejected the federal interpretation and says it followed the rules that were in place when the licenses were issued. Governor Kathy Hochul said on April 24 that pulling money for road safety projects is reckless and illegal. (ttnews.com) Attorney General Letitia James and the state filed a court challenge on April 24 seeking to overturn the withholding. The petition argues the Federal Motor Carrier Safety Administration changed its interpretation of long-standing regulations and exceeded its authority. (ttnews.com) (spectrumlocalnews.com) The case also carries a larger financial threat for New York. Trade publication Transport Topics reported the federal government is warning that up to $147 million a year could be withheld and that decertification of the state’s commercial licensing program remains on the table. (ttnews.com) Other states are under pressure too. California has already lost $200 million, while Pennsylvania, Minnesota and North Carolina have been warned they could face similar penalties if they do not satisfy federal reviewers. (pbs.org) (spectrumlocalnews.com) For now, the fight is moving from the Transportation Department to federal court. The immediate question is whether New York must rewrite its licensing decisions or whether Washington overstepped when it took away the money. (ttnews.com)
