NY, NJ Sue Trump Over $16B Funding Freeze

NEW YORK CITY — New York and New Jersey have sued the Trump administration after they froze $16 billion in federal funding for the construction of a new rail tunnel under the Hudson River.

The lawsuit was filed in Manhattan federal court by New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport. They are asking a judge to rule the funding freeze was unlawful and for payments to resume, so construction can continue.

Construction that has been underway could be forced to shut down as early as Friday if payments aren't released, according to the suit.

“Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk,” James said. ”Our tunnels are already under strain, and losing this project could be disastrous for commuters, workers, and our regional economy."

Similarly, on Monday, a separate lawsuit was filed against the Trump administration by the Gateway Development Commission — the panel overseeing the construction project.

The Gateway tunnel project aims to build a new rail tunnel under the Hudson River between New York and New Jersey that would carry Amtrak and other local transit trains.

In addition, they are repairing an existing 116-year-old rail tunnel that was damaged by Super storm Sandy in 2012. Construction work began in 2023 and gained federal funding after approval from then-president Joe Biden.

Governor Mikie Sherrill said if the project stops, around 1,000 workers will lose their jobs and thousands of commuters will lose out on having reliable train service " that makes their lives easier."

"Every time the Trump Administration gets involved, costs go up and working people suffer. The illegal attack on the Gateway Tunnel is yet another example. New Jersey will not back down from this fight," she said.

Governor Kathy Hochul had a one message for Donald Trump and Sean Duffy on Tuesday: "We'll see you in court."

"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. "New York will fight this illegal effort by the Trump Administration to steal the funding the federal government committed to get the Gateway Tunnel built with everything we've got.”

The Trump administration put a hold on funding in September during the government shutdown. At the time they said 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 White House has not commented on the lawsuits yet.

The Associated Press contributed to this report.