New York, New Jersey Sue to Release Frozen Hudson Tunnel Funds
The case, brought in a federal court in Manhattan by New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport, seeks a judicial ruling declaring the funding freeze unlawful. The states are also asking the court to order the immediate release of the funds so construction can continue without disruption.
James warned that halting the project would put one of the nation’s most heavily used transit routes at risk.
“Losing this project would be a disaster for our regional economy,” she said.
The Gateway Development Commission, the bi-state body responsible for overseeing the tunnel project and made up of representatives appointed by the governors of both states, has cautioned that construction activity could be forced to stop as early as Feb. 6 if funding remains blocked.
The project carries an estimated price tag of $16 billion and is financed under the federal infrastructure law enacted during the 2021–2025 period. It centers on building a new rail tunnel under the Hudson River to improve commuter rail connections between New York and New Jersey.
The lawsuit comes shortly after the Gateway Development Commission filed a separate legal challenge against the federal government, seeking access to reimbursement payments that have been withheld.
Federal authorities suspended the funding in late September 2025, raising concerns that construction could soon grind to a halt, potentially jeopardizing thousands of jobs and undermining the reliability of rail service in the region.
Passenger rail systems in the United States rely heavily on federal support. While freight rail operations are largely run by private companies, most long-distance passenger rail service is provided by Amtrak, a government-controlled corporation established in 1970.
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