New York and New Jersey filed suit against the Trump administration Tuesday, alleging the federal government has illegally withheld $16 billion in committed funding for the Gateway tunnel project, a critical rail infrastructure initiative connecting the two states beneath the Hudson River.
The lawsuit, filed in the Southern District of New York, seeks emergency judicial relief to compel the U.S. Department of Transportation to release funds that were previously allocated to the project. According to the complaint, construction crews are already at work on the tunnel, but operations may be forced to halt as early as Friday without the federal funding.
The states contend that the sudden freeze in federal support threatens to eliminate thousands of jobs tied to the construction effort and will impose substantial new operating costs on both New York and New Jersey taxpayers. The Gateway project represents one of the most significant infrastructure undertakings in the Northeast, designed to expand rail capacity between New Jersey and Penn Station in Manhattan.
The funding dispute stems from actions taken by the Trump administration during last fall’s government shutdown, when billions of dollars designated for the Gateway project were frozen. Federal funds for the extension of New York City’s Second Avenue Subway were similarly affected by the freeze.
State officials argue that the federal government made binding commitments to support the Gateway project and that the sudden withdrawal of funding violates those agreements. The emergency nature of the lawsuit reflects the immediate financial pressures facing the project, with contractors and workers dependent on the steady flow of federal dollars to maintain operations.
The Gateway tunnel has long been recognized as essential infrastructure for the region. The existing rail tunnels under the Hudson River, constructed more than a century ago, sustained significant damage during Hurricane Sandy and are in urgent need of replacement or supplementation. Transportation experts have warned that failure of the existing tunnels could cripple rail service between New Jersey and New York, affecting hundreds of thousands of daily commuters.
The Trump administration has not yet filed a formal response to the lawsuit. The Department of Transportation has previously indicated that funding freezes implemented during the shutdown were part of broader efforts to review federal spending commitments and ensure proper oversight of taxpayer dollars.
The case now rests with the federal court, where judges will determine whether the states are entitled to the emergency relief they seek. Given the Friday deadline cited in the complaint, a ruling could come within days.
The outcome will have significant implications not only for the Gateway project itself but also for the broader relationship between federal and state governments on major infrastructure initiatives. Both New York and New Jersey have invested substantial state resources in the project based on federal funding commitments, and a prolonged freeze could reshape how such partnerships are structured in the future.
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