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Feds sued a second time over halting Hudson River tunnel cash, this time by NY and NJ
By
Giulia Heyward
Published Feb 3, 2026
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Stephen Nessen
By
Giulia Heyward
Published Feb 3, 2026
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New York and New Jersey sued the Trump administration on Tuesday in an effort to unfreeze federal funding for a new set of train tunnels under the Hudson River.
The joint lawsuit filed by both state attorneys general in Manhattan federal court came a day after the Gateway Development Commission, which oversees the $16 billion mega-project, filed its own lawsuit over the White House’s decision to halt the funds.
Gateway officials said the freeze could require them to halt construction as soon as Friday.
While Monday’s litigation alleged the White House is in breach of contract, the new lawsuit from New York and New Jersey argues that the abrupt funding cut harms New York and New Jersey residents and also violates the Administrative Procedure Act because the decision lacks legal footing.
The new lawsuit asks the court to order the feds to resume payments so that the construction can continue.
“Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk,” New York Attorney General Letitia James said in a statement. “Our tunnels are already under strain, and losing this project could be disastrous for commuters, workers, and our regional economy.”
During the federal government shutdown in the fall, President Donald Trump declared he would “terminate” money allocated for the project, which aims to build the first new set of rail tunnels between New York and New Jersey since 1910.
At that time, the feds said the funding would be on hold while they reviewed requirements that a certain percentage of contracts for the project go to women- and minority-owned businesses.
The attorneys general wrote in the lawsuit that the project executives complied with all of the federal government’s requests, but the funding was never restored.
Last week, a White House spokesperson indicated in a statement that the money would continue flowing if Democrats in Congress agreed to fully fund the Department of Homeland Security.
Gateway officials said they need to build the new tunnels in order to close and repair the old ones, which were damaged in Hurricane Sandy in 2012 and primarily serve NJ Transit and Amtrak riders.
Project leaders said they’re at risk of collapse, but also said they won’t begin repairing them until the new tunnels open for service, which isn’t expected until 2035.
Neither the White House nor the U.S. Department of Transportation immediately responded to requests for comment.
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new york
transportation
Giulia Heyward
Giulia Heyward is a breaking news reporter on the Day-Of desk. She previously worked at NPR, as a breaking news reporter, and the New York Times, as a reporting fellow on the national desk. Her work has also appeared in CNN, The Atlantic and Politico. Got a tip? Email [email protected] or more securely on signal at 917-715-1458.
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