Work on the Gateway project to build new rail tunnels under the Hudson River will resume next week after the Trump administration released the roughly $200 million in federal funding owed to the commission overseeing construction.
The restored funding comes nearly a week after a federal appeals court declined to overturn a lower court’s ruling that the funding freeze was likely illegal and that payments must resume.
“We are working with our contractors to deploy these funds to resume work as soon as possible. Letters will be sent to contractors today, and construction activities are expected to resume next week,” the Gateway Development Commission said in a statement.
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Gov. Mikie Sherrill (D) told reporters Wednesday that President Donald Trump’s decision to halt federal funds for Gateway “was bewildering and illegal.”
“I took him to court because I care deeply about jobs and the economy, even if the federal government doesn’t seem to. So, I took him to court: we won. He fought it again: we won. We have seen the funds released and he continues to remain in court – but we’re just seeing again and again that what he’s doing is illegal,” she said. “And the worst part about it is now, he’s probably cost the project, which was on time and on budget, millions of dollars by halting all this work.”
Work on the tunnels has been paused since a line of credit the commission used to keep construction going amid the federal freeze expired on Feb. 6, prompting a work stoppage state officials said would cost up to $20 million each month.
New Jersey and New York, the two states that form the bistate commission, sued the federal government earlier this month, alleging that it violated the Administrative Procedures Act by halting payments to Gateway. That case spawned the orders that directed the federal government to stop the funding freeze.
The commission launched a separate suit in the Court of Federal Claims, alleging the federal government violated contractual provisions by withholding the funding.
Both cases are ongoing, and the courts have not issued final rulings on whether the federal government can withhold congressionally approved funding for Gateway. Congress has approved roughly $15 billion for the project.
“We continue to pursue all avenues to secure access to the full amount of federal funding for the Hudson Tunnel Project, including our lawsuit,” the commission said in its statement.
Trump administration officials have given shifting explanations for the pause, which began last fall.
They’ve said it was to prevent money from flowing to “unconstitutional DEI principles,” to check compliance with new rules for a grant program targeted at disadvantaged businesses, to check compliance with the program’s old rules, and then because of funding negotiations for the U.S. Department of Homeland Security.
State officials have argued those reasons were pretextual, noting the federal government did not move to restore funding after the commission made requested changes to its grant programs.
Trump has said he froze the funding because the project was sought by Democratic elected officials.
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