Attorney General James Sues Trump Administration for Freezing Gateway Program’s Hudson Tunnel Project Funding

Thousands of Workers in New York and New Jersey Stand to Lose Jobs if Construction is Disrupted

AG James Suing to Prevent Shutdown of Hudson Tunnel Project and Save New Yorkers’ Jobs

February 3, 2026

NEW YORK – New York Attorney General Letitia James, together with New Jersey Acting Attorney General Jennifer Davenport, today sued the Trump administration over its unlawful suspension of federal funding for the Hudson Tunnel Project, a critical infrastructure project essential to regional rail service and the national economy. On September 30, the Trump administration announced an abrupt and indefinite freeze on federal funding for the project, halting millions of dollars in reimbursements that Congress had already approved. After four months of covering costs with limited operating funds, the states warn that construction will be forced to completely shut down as soon as February 6 unless federal funding resumes. New York and New Jersey are seeking emergency relief to prevent construction from grinding to a halt.

“Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk,” said Attorney General James. “Our tunnels are already under strain and losing this project could be disastrous for commuters, workers, and our regional economy. We are taking the administration to court to prevent a shutdown that would ripple far beyond New York and New Jersey.”

The Hudson Tunnel Project is the central component of the Gateway Program, a long-planned effort to revitalize Hudson River rail travel. The project will repair the 116-year-old North River tunnel and build a new tunnel beneath the Hudson River. The tunnel was severely damaged during Superstorm Sandy and continues to deteriorate, causing frequent service disruptions and emergency maintenance that impact hundreds of thousands of commuters. Construction on the Hudson Tunnel Project began in 2023 and is currently underway across multiple active sites in New York and New Jersey.

New York and New Jersey have already invested hundreds of millions of dollars in the project, and the federal government has awarded more than $16 billion in total funding through multiple grant and loan programs. However, despite years of planning and coordination, on September 30, 2025, the U.S. Department of Transportation (DOT) abruptly halted all funding for the project. In response, project administrators promptly addressed every issue raised by the federal government and repeatedly certified full compliance with all applicable requirements. Nevertheless, DOT has refused to resume funding. As a result, without court intervention, work on the project will be forced to stop as early as February 6, 2026, placing one of the most important infrastructure projects in the country in jeopardy.

A shutdown of the Hudson Tunnel Project would have immediate and far-reaching consequences for New Yorkers and the entire region. Thousands of workers across New York and New Jersey could lose their jobs, and the states would face monumental new costs if forced to temporarily shut down construction sites or permanently terminate them. Any stoppage and restart of work on a project of this scale would dramatically raise costs and risk wasting years of planning and hundreds of millions of dollars already invested.

A prolonged shutdown also threatens the future of the project itself. Infrastructure projects of this magnitude depend on continuous construction, specialized equipment, and a skilled workforce. Extended delays increase the risk that work cannot be efficiently restarted, threatening the entire project.

Commuters would face some of the most dangerous impacts. Each weekday, more than 200,000 passengers rely on rail service through the Hudson River crossing to travel to work, school, and essential services. Without completion of the Hudson Tunnel Project, riders would have to continue to depend on the aging, storm-damaged North River Tunnel, which remains vulnerable to major service failures. Disruptions to this corridor would reverberate throughout the Northeast Corridor, the busiest passenger rail line in the country, and threaten a major transportation artery that supports approximately 20 percent of the nation’s economic output.

Attorney General James asserts that the funding freeze is not based on any legitimate compliance concern but instead reflects an unlawful, politically motivated decision. In public statements, including statements made by the president himself, the administration has been explicit that the suspension of funding is a brazen act of political retribution. The attorneys general argue that this violates federal law because the government cannot withhold funding without a valid legal basis, proper procedures, or a reasoned explanation.

Attorney General James and Acting Attorney General Davenport are asking the court to declare the funding suspension unlawful and order the immediate resumption of payments so construction can continue without interruption.