The U.S. Department of Transportation (USDOT) has issued a formal warning to the State of New York, intensifying pressure to end the controversial congestion pricing program in Manhattan. Federal officials have set a deadline of May 21 for state leaders to either halt the program or provide a legal defense justifying its continuation — or risk losing crucial federal funding for infrastructure projects.

In a letter sent to New York Governor Kathy Hochul, U.S. Transportation Secretary Sean Duffy criticized the state's ongoing implementation of the Central Business District Tolling Program, calling it “unlawful and unfair.” The program charges vehicles a fee to enter Manhattan below 60th Street, excluding the FDR Drive and West Side Highway.

“Federal funding cuts NY congestion pricing is a necessary response to Gov. Hochul’s defiance of federal law,” said Secretary Duffy. “President Trump and I will not allow working-class Americans to be priced out of New York City while federal dollars are used to backfill a failing transit budget.”

The USDOT previously revoked its approval of the program in February, terminating a cooperative agreement signed under the Value Pricing Pilot Program. Duffy warned that if the state fails to comply, the Federal Highway Administration (FHWA) may suspend project authorizations and withdraw grant obligations — except for safety-related initiatives.

Governor Hochul, however, remains defiant. “Congestion pricing is legal — and it’s working,” she stated. “Traffic is down, business is up, and the cameras are staying on.”

The program, launched on January 5, 2025, was authorized by a 2019 state law aimed at reducing gridlock in Manhattan and generating funding for the Metropolitan Transportation Authority (MTA). Although paused temporarily in 2024, it resumed with adjustments amid economic concerns.

New York agencies have until May 21 to formally respond to federal demands, either certifying the tolls have been halted or arguing that the program remains compliant with federal law. The FHWA may consider further enforcement actions if the state does not cooperate.

In response, the MTA and the Triborough Bridge and Tunnel Authority have filed a federal lawsuit, claiming the Trump administration has overstepped its authority and violated New York’s right to implement its own legislation.

A separate lawsuit by local groups challenging the tolls was dismissed last week by U.S. District Judge Lewis J. Liman, who upheld the legality of the revised tolls.

Despite ongoing legal battles, the federal government maintains it has full authority to withdraw from agreements that no longer align with national transportation priorities