NY and NJ sue Trump admin. over Gateway Tunnel Project funding
Gateway commission sues Trump admin. over project funding
New York and New Jersey sued the Trump administration on Tuesday for freezing $16 billion in federal funding for a new rail tunnel under the Hudson River. FOX 5 NY's Jessica Formoso has the details.
NEW YORK - Construction on a major rail project linking New York and New Jersey could grind to a halt as early as Friday.
What we know:
The shutdown threat comes after the Trump administration froze $16 billion in federal funding for the Gateway Project, prompting lawsuits from both states.
NEW YORK, NEW YORK - OCTOBER 17: Construction continues on the Hudson Gateway Tunnel project to connect New Jersey to Penn Station on October 17, 2025 in New York City. President Donald Trump recently said he "terminated" the $16 billion Hudson River
New York and New Jersey sued the Trump administration Tuesday in federal court in Manhattan, seeking an emergency ruling to restore the funding, so construction can continue without interruption. A separate lawsuit was filed Monday by the Gateway Development Commission, the agency overseeing the project.
What is the Gateway Tunnel Project?
The backstory:
Work on the project began in 2023 and is already well underway, with about $1 billion spent so far.
Officials warn that if funding is not released, construction will stop, about 1,000 workers could lose their jobs, and rail service for hundreds of thousands of commuters could be affected.
The Gateway Project calls for building a new rail tunnel under the Hudson River to carry Amtrak and regional transit trains between New Jersey and New York City.
It also includes repairs to an existing 116-year-old tunnel that was damaged during Superstorm Sandy in 2012.
Why did Trump freeze funding?
NEW YORK, NEW YORK - OCTOBER 17: Construction continues on the Hudson Gateway Tunnel project to connect New Jersey to Penn Station on October 17, 2025 in New York City. President Donald Trump recently said he "terminated" the $16 billion Hudson River
The Trump administration put a hold on the funding in September, initially citing last fall’s government shutdown.
At the time, White House budget director Russ Vought said on X that officials believed the spending was tied to unconstitutional diversity, equity and inclusion (DEI) policies.
The U.S. Department of Transportation said it was reviewing any "unconstitutional practices."
NEW YORK, NEW YORK - OCTOBER 17: Construction continues on the Hudson Gateway Tunnel project to connect New Jersey to Penn Station on October 17, 2025 in New York City. President Donald Trump recently said he "terminated" the $16 billion Hudson River
The funding was approved by Congress under the 2021 federal infrastructure law signed by Democratic President Joe Biden.
In their lawsuit, New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport argue the funding freeze is unlawful and violates federal obligations. They are asking a judge to immediately order payments to resume.
Commuters walk through an entrance area with bright yellow enameled wall panels at Sendlinger Tor metro station in Munich, Bavaria, Germany, on January 22, 2026. (Photo by Michael Nguyen/NurPhoto via Getty Images)
What they're saying:
State officials say the economic impact of halting construction could reach $100 million per day and warn that disruptions would ripple throughout the Northeast, a region that accounts for about 20% of the nation’s gross domestic product.
Why you should care:
Roughly 200,000 passengers rely daily on Amtrak and NJ Transit service that would be supported by the new tunnels, according to officials.
The White House and the U.S. Department of Transportation did not immediately respond to requests for comment Tuesday night.
The Source: This report is based on information from the Associated Press.