New York sues US gov't for canceling $73.5 million fund for new highway

WASHINGTON - New York sued the Trump administration for withholding more than $73.5 million in highway funding over the state's decision not to revoke some commercial driver licenses.

New York Attorney General Letitia James and Governor Kathy Hochul said the legal challenge on Friday seeks to reverse the decision by the U.S. Transportation Department last week to cancel the funding after the state refused the federal government's demands to revoke certain driver's licenses.

New York says the loss of funding puts New Yorkers at risk, while USDOT said in December an audit found New York had been routinely issuing commercial driver licenses to foreign drivers illegally.

USDOT did not immediately comment.

"Once again, New York is facing devastating federal cuts for nothing more than political payback," Hochul said. "Ripping away money that goes towards critical safety upgrades on our roads is reckless and it is illegal."

USDOT has also threatened to annually withhold an additional $147 million in future years. New York said revoking these licenses "would disrupt key industries that rely on commercial drivers and could lead to bus driver shortages affecting schools and families."

New York, California and other states have repeatedly sued the Trump administration over withholding transportation funds and accused it of political motivations.

In March, a judge ordered USDOT to unfreeze about $3 billion in funding for rail projects in Chicago after USDOT canceled at least $9.5 million in ‌reimbursements since October from grants previously approved under former President Joe Biden. The city had ⁠called the ⁠funding suspension an unlawful act of political retaliation.

-Reporting by David Shepardson; editing by Edward Tobin/Reuters