4.02.2026

New York, New Jersey Sue to Unfreeze Rail Project Funds

NEW YORK (AP) — 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 between the two states, seeking a quick ruling because construction that has been underway could be forced to shut down as early as Friday

On Tuesday, New York and New Jersey filed a lawsuit against the Trump administration over the freezing of $16 billion in federal funding intended for a new rail tunnel under the Hudson River. This legal action aims to seek a swift ruling, as ongoing construction may be forced to halt as early as Friday. The funding suspension was initially implemented in September, following the government shutdown, and was publicly justified by the White House budget director, Russ Vought. He stated that the administration believed the funding was based on unconstitutional principles related to diversity, equity, and inclusion.

The lawsuit was filed in federal court in Manhattan by New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport. It requests that a judge declare the suspension of funding unlawful and order an immediate resumption of payments to ensure that construction can proceed without interruption. Attorney General James emphasized the urgency of the matter, stating that halting the project would jeopardize one of the busiest transit corridors in the U.S. She noted that the existing tunnel infrastructure is already under significant strain, and discontinuing this project could have disastrous consequences for commuters, workers, and the regional economy.

In addition to this lawsuit, the Gateway Development Commission, which is the local panel overseeing the tunnel project, also filed a similar legal action against the federal government on Monday. This indicates a growing concern regarding the federal funding suspension and the potential impact on the project that is vital for public transportation between New Jersey and New York City.

The construction project not only aims to build a new rail tunnel under the Hudson River to facilitate Amtrak and regional transit trains but also includes essential repairs to an existing rail tunnel that is over 116 years old. This existing tunnel was significantly damaged by Superstorm Sandy in 2012 and has since required urgent attention to remain operational. The project began in 2023 and is being financed by the 2021 federal infrastructure law, which was signed into effect by President Joe Biden.

The implications of this lawsuit and the funding dispute highlight the intricate relationship between state and federal authorities, especially when it comes to large-scale infrastructure projects. The outcome of this legal battle could set a precedent for how similar disputes are handled in the future, particularly concerning the federal government’s role in funding state projects that are deemed politically contentious.

The White House and the U.S. Department of Transportation did not respond to inquiries for comment on the matter in the evening following the suit's filing. The lack of communication from these agencies has further fueled uncertainty around the future of the rail tunnel project. Stakeholders and the public alike are anxiously awaiting a timely resolution that will allow construction to continue uninterrupted, maintaining vital connections and transit capabilities between two of the nation’s largest metropolitan areas.