Court blocks Trump from using New York’s highway money as leverage

A federal appeals court on Friday struck down the Trump administration’s decision to withhold $73.5 million in highway funds from New York.

The Transportation Department held back the money in April because New York refused to revoke about 33,000 commercial driver’s licenses. The U.S. Court of Appeals for the Second Circuit said the department “went beyond its legal authority.” Its decision “runs afoul of fair notice principles, departs from the regulatory text, and underestimates the complexity of its supposedly ‘common sense’ requirement,” the court wrote, as quoted by Reuters.

The court said no.

Congress appropriates highway money for roads and bridges. The administration tried to turn it into a penalty for a state that refused its demand. New York Attorney General Letitia James warned that another $147 million a year could be at risk.

This was not a one-off. The department found California noncompliant in January and said it would withhold $160 million there. Holding back road money has become one of the administration’s levers for forcing states to follow its immigration demands.

The department called it a safety action and pointed to a December 2025 audit of New York’s commercial licenses for non-U.S. residents. It found 107 of 200 sampled records, or 53%, were issued using expired lawful-presence documents, and gave New York 30 days to revoke them. New York said every driver was authorized when licensed and that it followed the rules in place at the time. The court did not rule on the audit itself. It ruled on whether the government could use highway funds as leverage.

When New York sued in April, the federal government declined to comment, the Associated Press reported. As of the ruling, no administration response was reported.

This is the fairness test. Whatever you think of the licenses, the question was whether Washington can cut off a state’s road money because the state would not do what it was told. The court said the law does not allow it.

You do not have to be a Democrat to say no to that. Your roads are not leverage for political fights.

The ruling also bears on the $160 million threatened against California. If highway money can be held back to win one fight, it can be held back to win the next.

• Ask your mayor or county leaders which road or bridge projects were at risk from this withheld funding
• Call your representative and say federal dollars should never be used to punish your town for political fights
• Share this with a neighbor who thinks these power plays do not hit their commute
• Check your voter registration at Vote.gov

Countdown

The swearing-in of the new Congress is in 50 days.

References

Appeals court strikes down Trump’s withholding of $73.5 million in New York highway funds – Nov 13, 2026
Appeals court strikes down Trump’s withholding of $73.5 million in New York highway funds – Apr 24, 2026