The Trump administration has pulled $73 million in federal highway funding from New York after the state refused to revoke commercial drivers’ licenses illegally issued to immigrant truck drivers.
Transportation Secretary Sean P. Duffy made good on his threat to withhold the federal funding after giving the state four months to come into compliance following an audit.
Duffy said New York officials have basically ignored the U.S. Department of Transportation’s demands to conduct its own audit and cancel illegally issued CDLs.
So far, the Empire State is refusing to revoke 33,000 questionable licenses it has given to foreign truck drivers. The group includes illegal immigrants and those whose work authorizations or other legal status would expire before their licenses.
Last year, the Federal Motor Carrier Safety Administration conducted a nationwide audit and discovered concerning procedural errors in several states.
In New York, the investigation exposed a 53% failure rate in the records sampled, indicating “a total collapse in the administration of New York’s non-domiciled CDL program.”
Duffy noted that immigrants make up roughly 20% of all truck drivers, but non-domiciled licenses are only permitted to represent 5% of CDL drivers.
“I promised the American people I would hold any state leader accountable for failing to keep them safe from unvetted, unqualified foreign drivers,” Duffy said. “I’m delivering on that promise today by refusing to fund Governor Hochul’s dangerous, anti-American policies.”
The DOT maintains the New York Department of Motor Vehicles disregarded federal rules and routinely issued CDLs to foreign drivers illegally.
The FMCSA sent a letter to Gov. Kathy Hochul on April 16, outlining a final determination of substantial noncompliance and plans to pull the funding.
The $73,502,543 the federal government is withholding represents 4% of New York’s federal highway dollars, CBS News New York reported.
The money funnels through the National Highway Performance Program and Surface Transportation Program Block Grant funds, according to the DOT.
Sources told CBS the funds are earmarked for road and bridge repairs, so it will mean less money to repave roads, upgrade aging infrastructure and repair potholes.
The state-federal showdown in New York is the latest fallout from a nationwide investigation into non-domiciled CDLs.
The audit found states, particularly Democratic-controlled states, failed to verify information or issued CDLs contrary to federal DOT rules and regulations.
“Does pulling federal highway money from states that don’t follow the rules of the road work? The short answer: YES. Just ask Gavin Newsom,” Duffy shared on his X account. “New York is losing $73 MILLION for illegally issuing commercial driver’s licenses. Now it’s time for Kathy Hochul to do her part and protect Americans.”
Does pulling federal highway money from states that don’t follow the rules of the road work?
The short answer: YES. Just ask Gavin Newsom.
New York is losing $73 MILLION for illegally issuing commercial driver’s licenses. Now it’s time for Kathy Hochul to do her part and… pic.twitter.com/LZPleP9qH7
— Secretary Sean Duffy (@SecDuffy) April 16, 2026
Based on a sampling of CDLs, FMCSA’s audit of New York’s non-domiciled CDL issuance practices found numerous failures by the state of New York.
Out of 200 sampled records, 107 were issued in violation of federal law—a failure rate of over 53%. The DMV’s systems defaulted to issuing 8-year licenses to foreign drivers for non-REAL ID licenses, regardless of when their legal status expired.
In addition, auditors found the state’s DMV issued commercial licenses to foreign drivers without providing any evidence that it had verified their work authorization or legal status in the United States.
On top of that, when presented with the compliance issues, New York failed to complete required corrective actions, including canceling all noncompliant non-domicile CLPs and CDLs.
“FMCSA’s mission is safety,” FMCSA Administrator Derek Barrs said in a statement on the funding showdown. “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”
Duffy appeared on “The Sunday Briefing” to discuss the standoff with New York and said the DOT requested the state do its own audit and revoke licenses issued contrary to the rules.
In December, Duffy said he was giving New York 30 days to get in compliance. Those 30 days have since passed.
“This is not Democrat, Republican, Conservative or Liberal,” Duffy told Peter Doocy on “The Sunday Briefing.” “Everybody agrees with safety… And essentially New York said ‘go pound sand DOT.’”
Duffy said yanking the $73 million in federal highway funding is the first step, adding “There’s more money we can pull.”
He’s withholding the federal highway money “until the state follows our rules and makes sure foreign truckers are vetted and qualified.” Another $147 million could be in jeopardy if Gov. Hochul doesn’t comply.
As a last resort, the DOT can take steps to stop the state from issuing commercial drivers’ licenses, but unfortunately Duffy doesn’t have the authority to cancel ones already issued.
“I wish I had the power and control to take those licenses away,” Duffy said on “The Sunday Briefing.” “I don’t. We give this right to the states, so I have to work with the states as the head of DOT federally to get them to comply with us, but I don’t have that control.”
The bigger concern is that semi-truck drivers don’t stay in New York. They drive across the country and endanger families who are going to church or the grocery store.
The DOT has uncovered “a whole slew of fake schools” that issue certifications and help foreigners obtain CDLs without understanding English or basic rules of the road.
“And then they get on American roads and they hurt the American people,” Duffy said. There are countless Americans who want to drive trucks and instead we have illegals or foreigners getting these jobs, and they’re hurting the American people. We are not going to tolerate it.”
Duffy carried out a similar threat in California last year after the FMCSA found systemic failures with how the state issued non-domiciled CDLs, violating federal compliance standards.
The audit found California’s Department of Motor Vehicles failed to align CDL expiration dates with the legal work authorization of foreigners, with some licenses extending years beyond their authorized stay.
In November, the California DMV admitted there were issues with 17,000 non-domiciled CDLs. The state agreed to revoke the licenses, but a group of truckers filed a class-action lawsuit against the state to prevent them from canceling the CDLs.
On March 2, 2026, the Alameda County Superior Court issued a ruling in Doe v. Department of Motor Vehicles, allowing the CDL holders who received a cancellation letter to reapply for a CDL and have the license re-issued, according to the Asian Law Caucus representing the truckers.
However, the FMCSA published a final rule change restricting eligibility for non-domiciled CDLs. Effective March 16, the rule limits non-domiciled CDL eligibility to H-2A, H-2B and E-2 visa holders.
The change bans the use of Employment Authorization Documents for proof of eligibility. States must verify immigration status through the federal Systematic Alien Verification for Entitlements system, which is predicted to impact an estimated 200,000 drivers.
The new rules exclude many previous immigrant categories such as general EAD holders, asylum seekers, refugees and DACA recipients. Drivers must provide the required evidence of lawful status.
The FMCSA also issued a pause on the processing of new non-domiciled CDL applications while the rule change made its way through a legal challenge and officially took effect.
States DMVs have been directed to review their programs and comply with the new requirements. They’ve been told to revoke or downgrade non-domiciled CDLs that do not meet the new, stricter standards.
Despite the lawsuit, the California DMV announced it would cancel approximately 13,000 non-domiciled CDLs on March 6, following pressure to comply with the federal audit findings and new rules, according to a news release.
