Transportation Secretary Sean Duffy Withholds $73 Million in Highway Funds from New York Over Commercial Licenses Issued to Undocumented Immigrants

U.S. Transportation Secretary Sean Duffy announced the withholding of approximately $73 million in federal highway grants from New York State after officials declined to rescind commercial driver’s licenses (CDLs) that the state had issued to individuals without lawful immigration status. The move escalates a broader confrontation between the Trump administration and several Democratic-led states over driver licensing policies and federal immigration enforcement.

The federal decision invokes the Department of Transportation’s oversight authority under the Federal Motor Carrier Safety Administration (FMCSA), which establishes uniform national standards for commercial trucking. Under 49 CFR Part 383, states are required to verify an applicant’s lawful presence and domicile in the United States before issuing a CDL, and non-domiciled CDLs are limited to specific visa categories. Federal officials contend that New York’s issuance practices failed to comply with these standards, triggering grounds for a funding clawback. Secretary Duffy has publicly argued that allowing unauthorized drivers to operate 80,000-pound commercial vehicles poses a safety risk, pointing to recent high-profile highway fatalities involving commercial drivers as justification for tightened enforcement.

New York’s position stems from the Driver’s License Access and Privacy Act, known as the Green Light Law, which took effect in December 2019 and made New York the 13th state to permit undocumented residents to apply for standard, non-REAL ID driver’s licenses. State officials have long maintained that the law improves road safety by ensuring that more drivers are tested, insured, and identifiable. However, the current dispute is narrower: it concerns CDLs, which are federally regulated and subject to stricter documentation requirements than standard licenses. State officials have indicated they are reviewing the federal action and weighing legal options, arguing that the withholding of highway formula funds exceeds the Transportation Secretary’s statutory authority.

The funding dispute is likely to head to federal court, where judges will weigh whether the DOT followed proper administrative procedure in suspending the grants and whether the amount withheld is proportional to the alleged violations. In parallel, the FMCSA is expected to conduct a formal program review of New York’s CDL issuance system, a process that can result in downgraded compliance ratings and further funding consequences. Industry groups representing trucking companies have called for clearer federal guidance, noting that commercial fleets depend on a consistent national standard for driver credentialing, particularly as the industry continues to grapple with a driver shortage the American Trucking Associations has estimated at roughly 60,000 positions.