New York has filed a lawsuit against the Trump administration, accusing federal officials of unlawfully withholding more than $73.5m in highway funding linked to a dispute over commercial driver licences.

The legal action, brought in the U.S. Court of Appeals for the Second Circuit, challenges a decision by the U.S. Department of Transportation to cancel the funding after the state declined to revoke certain licences, News.Az reports, citing Reuters.

State leaders push back

New York Attorney General Letitia James and Governor Kathy Hochul said the move by Washington was unjustified and could have serious consequences for infrastructure and public safety.

State officials argue that the loss of funding threatens road maintenance and transport projects, potentially putting residents at risk.

They are seeking to have the federal decision overturned and the funds restored.

Federal concerns over licensing

The dispute centres on the issuing of commercial driver licences, with federal authorities alleging irregularities in New York’s practices.

The Department of Transportation said an audit conducted in December found the state had been routinely issuing commercial licences to foreign drivers in violation of federal rules.

Officials in Washington have maintained that compliance with national standards is required to ensure road safety and consistency across states.

Broader political tensions

The case highlights ongoing tensions between state and federal authorities under President Donald Trump, particularly on issues involving regulation and enforcement.

Legal experts say the outcome could set an important precedent for how far federal agencies can go in using funding as leverage to enforce policy compliance at the state level.

What happens next

The appeals court is expected to consider whether the federal government acted within its authority in withdrawing the funds.

If New York succeeds, the ruling could restore the funding and limit similar actions in future disputes. If the administration prevails, it may reinforce federal power to tie funding to regulatory compliance.

For now, both sides remain firmly opposed, with the case likely to be closely watched by other states facing similar federal scrutiny.

News.Az 

By Faig Mahmudov