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U.S. Transportation Secretary Threatens to Withhold Federal Funds from Manhattan Over N.Y. Tolling Strategy

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Published on April 21, 2025
U.S. Transportation Secretary Threatens to Withhold Federal Funds from Manhattan Over N.Y. Tolling StrategySource: Wikipedia/United States Department of Transportation, Public domain, via Wikimedia Commons

In a recent communication, U.S. Transportation Secretary Sean P. Duffy laid out potential consequences for New York if Governor Kathy Hochul maintains the state's tolling strategy, which is claimed to disproportionately affect working families. According to a statement from the U.S. Department of Transportation, the focus of this ultimatum centers on the withholding of federal funding for projects in Manhattan, exempting only those critical for safety.

"President Trump and I will not sit back while Governor Hochul engages in class warfare and prices working-class Americans out of accessing New York City," Duffy said. The threat to suspend FHWA-supported construction could signal a significant shift in federal support for New York infrastructure initiatives, potentially impacting numerous projects throughout Manhattan, as reported by the Department of Transportation.

In direct terms, the federal government has given New York thirty days to justify the legality of its toll system, as it is currently considered out of compliance with federal law. The specifics of the ultimatum entail a cessation of advance construction authorizations, a stop to NEPA approvals for projects not related to safety, and a freeze on approvals for Statewide Transportation Improvement Program amendments concerning the NY Metropolitan Transportation Council TIP modifications.

These measures can lead to far-reaching effects in New York, particularly in Manhattan, where several infrastructure projects could stall in the face of suspended federal authorizations and approvals. The FHWA has made it clear that while safety projects will proceed, all other endeavors are at risk. As stated by the federal agency, "No further advance construction (“AC”) authorizations for projects within the borough of Manhattan, except for projects determined by FHWA to be essential for safety," will be permitted, representing a stark bifurcation of support, as mentioned by the Department of Transportation.

New York's response to this federal pressure remains to be seen, but the clock is ticking. The FHWA has given the state 30 days to adjust its toll plan or risk losing funding. Whatever Governor Hochul’s team decides next could impact New York City’s transportation system for years.