NEW YORK (WABC) — New York and New Jersey have sued the Trump administration 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 underway could be halted as early as Friday.
The administration put a hold on the funding in September, citing the government shutdown. The White House budget director, Russ Vought, said on the social platform X at the time that officials believed the spending was based on unconstitutional diversity, equity and inclusion principles, and the U.S. Department of Transportation said it was reviewing any “unconstitutional practices.”
The lawsuit, filed in federal court in Manhattan on Tuesday night by New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport, seeks a judge’s declaration that the funding suspension is unlawful and an order to resume payments immediately so construction can continue without interruption.
Both governors Kathy Hochul and Mikie Sherrill said they will fight this effort by the Trump administration.
“Donald Trump’s revenge tour on New York threatens to derail one of the most vital infrastructure projects this nation has built in generations, putting thousands of union jobs and billions of dollars in economic benefits in jeopardy and threatening the commutes of 200,000 riders,” Hochul said.
Sherrill will hold a news conference on Wednesday afternoon.
The Gateway Development Commission also filed a lawsuit in federal court in Washington, alleging that the U.S. Department of Transportation breached its contractual obligations by withholding more than $205 million without legal basis, claiming the funds were withheld to punish Democrats over last fall’s government shutdown.
In October, President Donald Trump said he had terminated the project, and, without additional funding, the Gateway Development Commission warned it would be unable to continue work on the $16 billion project after Friday. That could leave about 1,000 union workers without jobs.
In the lawsuit, the commission said that, without federal funding this week, it will be unable to pay contractors to continue construction, causing work on the critical project to grind to a halt. The filing warns that this would leave unfinished work sites with massive holes in the ground, threaten the livelihoods of hundreds of construction employees, burden the commission with enormous costs from delays and penalties, and put the project’s future viability in question.
The White House and U.S. Transportation Department did not immediately return emails seeking comment Tuesday night.
White House spokesperson Kush Desai last week tied the tunnel funding to an ongoing dispute over immigration enforcement, saying, “It’s Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway Tunnel Project by refusing to negotiate with the Trump administration. There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”
The construction project calls for building a new rail tunnel under the river to carry Amtrak and local transit trains between New Jersey and New York City, and for repairing an existing 116-year-old rail tunnel damaged by Superstorm Sandy in 2012.
Work began in 2023. The project is funded by the 2021 federal infrastructure law signed by Democratic President Joe Biden.
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Some information from the Associated Press
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