Court Order Unlocks First $30 Million for Gateway Hudson Tunnel as Legal Fight Continues
The Trump administration released $30 million in suspended federal financing for the Gateway Hudson Tunnel project after a federal judge ordered it. New Jersey officials announced the first piece of the $205 million in disputed funding has been released, a major move in one of the nation’s most closely watched infrastructure disputes.
Gov. Mikie Sherrill of New Jersey said the federal government had started distributing funds, calling it as the first step toward restoring full project funding. She stressed that the initial $30 million is significant, but the state expects Congress’ entire amount.
The Gateway Hudson Tunnel Project, a $16 billion infrastructure initiative to create two new rail tunnels beneath the Hudson River and restore century-old tunnels connecting New Jersey and New York, is up for funding. The Northeast Corridor, one of the busiest passenger rail routes in the US, depends on the project.
After federal transportation agencies stopped 2024 financing, construction was halted in early February. New Jersey, New York, and the Gateway Development Commission, which manages the project, sued over the freeze. The states claimed the federal government had breached contracts by withholding congressionally approved funding.
United States District Judge Jeannette A. Vargas ordered the federal government to restore funding after the lawsuit. After a federal appeals court declined to overrule the lower court’s order, legal arguments continued. The U.S. Department of Justice must report on its compliance with the court’s order.
The U.S. Department of Transportation informed the court that payments had begun, but processing was still proceeding. State spokespeople said $30 million has been disbursed, with the rest expected.
While grateful for the initial release, the Gateway Development Commission said building will not start until the whole $205 million is restored. Commission representatives said they are working with contractors to efficiently deploy newly released cash so workers may return to work locations.
Construction stopped, laying off dozens of union workers. North Bergen workers prepared for major tunneling operations, where one of two tunnel boring machines will drill into the Palisades. The building halt slowed development and generated concerns about rising expenses. On top of legal fees, state officials say delays may cost $20 million every month.
At a Secaucus Junction press conference, Governor Sherrill underlined that Congress had approved the financing and that it belongs to the American people. The state will return to court if more monies are not released quickly, she said.
U.S. Rep. Rob Menendez also supported returning the monies, saying public transit infrastructure is vital to the region’s economy. He was confident that the states would win in court, citing repeated federal failures to withhold congressionally granted funds.
The bigger lawsuit continues. The administration’s district court challenge will be argued before the appeals court. To guarantee financing continues as ordered by the court, New Jersey and New York attorneys have sought extra legal protections.
The Gateway project matters nationally. Superstorm Sandy destroyed the century-old Hudson River rail tunnels, which serve hundreds of thousands of people everyday. Transportation experts have long warned that a big service disruption could devastate the regional and national economy.
State executives say $205 million is needed to stabilize the project and send people back to work, but the release of $30 million shows compliance with the court’s emergency order. For now, the partial payment is progress, not the conclusion of the dispute.
Sources
U.S. District Court filings
U.S. Court of Appeals records
U.S. Department of Transportation official statements
Gateway Development Commission official statements
Office of the Governor of New Jersey official statements
