New York won a court order temporarily barring the Trump administration from withholding federal approvals or funds for the state’s transportation projects, as the president tries to end Manhattan’s congestion pricing program. 

The administration has threatened to hold back the funds and permissions unless New York stops charging tolls to drive into the borough’s tolled zone. U.S. District Judge Lewis Liman on May 27 granted a request by the Metropolitan Transportation Authority (MTA) to block such efforts by the federal government through June 9 while he considers whether the U.S. has the legal right to terminate the toll.

Liman’s ruling means the program — designed to reduce gridlock and pollution and raise money to modernize the city’s transit system — will almost certainly continue as the legal battle proceeds. It helps reduce uncertainty over how the nation’s largest public transportation system will pay to modernize a more than 100-year-old network. The judge ordered the two sides to meet to decide how to speed up the process, saying there is a “public interest in moving the case along.”

The ruling is a win for local government as the Trump administration withdraws support for regional projects or takes over development. U.S. Secretary of Transportation Sean Duffy has cited subway system crime in wielding the threat of withheld funds, and announced in April that the federal government, instead of the MTA, would be in charge of renewing New York’s Penn Station. Earlier this month President Donald Trump said the U.S. wouldn’t finance California’s high-speed rail project, which has suffered from delays and escalating costs.

‘No More Coercive Threats’ 

Outside court on after Liman ruled, MTA Chairman Janno Lieber greeted the ruling as a welcome warning from the judge to the government.

“The message is he wants no more coercive threats and threats of punishment if we don’t do what they say. That was pretty clear. So I don’t think we’re going to have another letter like that,” Lieber said of Duffy’s threats. The judge “wants the parties to come up with a schedule for this litigation that will put it behind us.”

Governor Kathy Hochul, a Democrat, said in a statement that the court order is “a massive victory for New York commuters, vindicating our right as a state to make decisions regarding what’s best for our streets.”

The judge found that the MTA had demonstrated that it was likely to succeed in its claims. He said it would probably suffer “irreparable harm” without a temporary restraining order, noting that the government’s effort to undo U.S. approval of the congestion pricing program had already affected the value of MTA bonds. 

“Enforcement actions for noncompliance were merely under consideration, and we will comply with the judge’s request to hold,” a spokesperson for the U.S. Department of Transportation said in a statement. “We look forward to making our case in court against Hochul’s illegal tolls as we work to protect working-class Americans from being unfairly charged to go to work, see their families or visit the city.”

Cloud of Uncertainty

The program has operated under a cloud of uncertainty since it began almost five months ago, as Trump tries to stop it. The MTA sued Duffy after he sent a letter on February 19 reversing U.S. approval of the plan won under former President Joe Biden. The suit seeks a court declaration that the attempt to halt the program is illegal.

Trump has said the congestion pricing plan will hurt the local economy, and Duffy in February called it “a slap in the face to working class Americans and small business owners.” Hochul says the toll was urgently needed and has pointed to MTA data to show it is working. New York maintains it won’t stop the tolls unless the court tells it to.

Roberta Kaplan, a lawyer for the MTA, said accepting the U.S. position “would give the government the unilateral right to terminate any contract it enters into” and is a “recipe for chaos” that would create an “eternal fog of uncertainty.”

Charles Roberts, a lawyer for the U.S., said the administration still hasn’t decided whether the MTA is in violation of their contract or whether to implement any of the compliance measures it laid out in an April letter that ordered the state to shut down the program by May 21.

‘Not Damocles’ Sword’

“Obviously if we had said compliance measures begin tomorrow, that would be Damocles’ sword,” he said. “That’s not Damocles’ sword. That’s an ongoing agency process that hasn’t been consummated. They are not imminent.”

The MTA runs the city’s subways, buses and commuter lines and is implementing the new toll. Its $68.4 billion 2025—2029 capital program is counting on $14 billion of federal funding. Projects at risk in the near term include $2.2 billion of plans for subway and bus maintenance, along with railroad track work the state recently submitted for federal approval, according to court documents. 

Duffy had threatened to start withholding authorizations and federal money as soon as Wednesday if the MTA continues to charge drivers under the congestion program. Most motorists pay $9 during peak hours to enter Manhattan south of 60th Street.

The toll brought in $159 million in the first three months of the program and is on target to raise $500 million this year after expenses, according to MTA officials. The MTA anticipates borrowing against the revenue collections to finance $15 billion of transit upgrades that will renew train signals from the 1930s, add elevators to stations and extend the Second Avenue Subway to Harlem.

The fee has helped ease traffic in the area. About 8.1 million fewer vehicles entered Manhattan’s central business district from the launch of the tolling on January 5 through April, for a daily average decline of 11%, according to MTA data.

While many drivers grumble at paying more to get to work, appointments and other events, support for the toll is growing as people experience faster commutes and less traffic. A Siena College Poll conducted May 12-15 found that 39% of registered voters in the state want the fee to remain, up from 29% in December who supported it.