Feds Withhold $73M in Highway Funds from New York

Audit finds over 50% of commercial licenses issued to foreigners were illegal

Apr. 16, 2026 at 8:35pm

Got story updates? Submit your updates here. ›

A serene, photorealistic painting of an empty highway at dusk, with warm light and deep shadows creating a contemplative, cinematic mood that evokes the political tensions surrounding federal transportation funding.The federal government's decision to withhold millions in highway funds from New York casts a somber shadow over the state's aging infrastructure.NYC Today

The federal government is withholding $73 million in highway funds from New York state after an audit found more than half of the state's commercial trucking licenses issued to foreigners were issued illegally. Transportation Secretary Sean Duffy said the funds, earmarked for road and bridge repairs, will not be released until New York addresses the licensing issues.

Why it matters

The withholding of federal highway funds will mean less money for New York to repave roads, upgrade aging infrastructure, and repair potholes, impacting the state's ability to maintain its transportation network. The dispute also highlights ongoing tensions between the federal government and New York state over transportation policy and funding.

The details

The $73,502,543 the federal government is withholding represents 4% of New York's federal highway dollars. An audit of 200 sampled records found that 107 Commercial Driving Licenses issued to foreigners -- more than 53% -- were issued illegally. In December, Duffy gave New York 30 days to get in compliance, but the state has failed to do so.

  • In December 2025, Duffy gave New York 30 days to address the licensing issues.
  • The 30-day deadline has since passed without New York coming into compliance.

The players

Sean Duffy

U.S. Transportation Secretary who announced the decision to withhold $73 million in federal highway funds from New York.

Kathy Hochul

Governor of New York, whose administration has been accused of issuing commercial driver's licenses to foreigners illegally.

Derek Barrs

Federal Motor Carrier Safety Administrator who spoke out about the decision to withhold funds, stating that FMCSA's mission is to ensure all commercial drivers are properly vetted and qualified.

Got photos? Submit your photos here. ›

What they’re saying

“I promised the American people I would hold any state leader accountable for failing to keep them safe from unvetted, unqualified foreign drivers. I'm delivering on that promise today by refusing to fund Governor Hochul's dangerous, anti-American policies.”

— Sean Duffy, U.S. Transportation Secretary

“FMCSA's mission is safety. That means ensuring that every commercial driver on the road is properly vetted and qualified. New York's continued refusal to fix these failures undermines that mission, and we will not allow federal dollars to support a system that falls short of the law.”

— Derek Barrs, Federal Motor Carrier Safety Administrator

What’s next

The judge in the case will decide on whether or not to allow New York to regain access to the withheld $73 million in federal highway funds.

The takeaway

This dispute highlights the ongoing tensions between the federal government and New York state over transportation policy and funding, as well as concerns about the integrity of the state's commercial driver's license program. The withholding of critical highway funds will put pressure on New York to address the licensing issues and restore federal trust.