Judge permanently restores Gateway tunnel funding after Trump freeze

New Jersey and New York win a final court order allowing work on the Hudson River rail project to continue.

A federal judge has permanently blocked the Trump administration from cutting off funding for the Gateway Tunnel project, ending months of legal wrangling and allowing the $16 billion job to move forward.

In her June 29 ruling, U.S. District Judge Jeannette A. Vargas wrote that even the government did not dispute that the administration’s September funding freeze “flagrantly violates federal law” because it did not follow the correct procedures or give the Gateway Development Commission a chance to object.

The decision means work on the vast rail infrastructure program — which includes a set of new railroad tunnels under the Hudson River — can continue unabated as Amtrak looks to modernize the most congested part of the Northeast Corridor, which connects Washington, D.C., to Boston.

Supporters have called Gateway the most critical transportation project in the nation, and they say the regional economy and rail network could face years of disruptions without it.

Officials from New Jersey and New York praised the ruling, with Gov. Mikie Sherrill, Gov. Kathy Hochul, and their respective attorneys general saying in a joint statement that they were grateful for the court’s decision.

“This is the most important infrastructure project in the nation, and thanks to our litigation, 1,000 people are back on the job, and construction continues every day,” they said. “This victory sends a clear message: the Trump administration’s attempt to halt Gateway funding will not stand.”

The Gateway commission, which oversees the mammoth project, was similarly pleased.

“We are grateful for New York and New Jersey’s support to restore federal funding to the Hudson Tunnel Project,” commission vice president Catherine Rinaldi said in a statement. “The Hudson Tunnel Project is the most urgent passenger rail project in the country, and [we] remain committed to partnering with our federal funders to deliver this critical investment in America’s rail network.”

‘Tell him it’s terminated’

The Gateway program includes several different pieces, including the construction of the new two-tube Hudson River Tunnel; the rehabilitation of the 116-year-old North River Tunnel, which was damaged during Hurricane Sandy in 2012; and the replacement of several old, failing bridges, among other things.

The 9-mile stretch of track it seeks to replace is one of the busiest in the nation, with 450 trains conducting 200,000 passenger trips between the two states every day.

Work had already begun when the U.S. Department of Transportation abruptly decided Sept. 30 that it would “indefinitely suspend payment of all project funds” pending a review of Gateway’s compliance with new federal discrimination laws.

But Trump muddled the reasoning two weeks later when he implied that he’d made the call himself because of a political rivalry with New York Sen. Chuck Schumer, the Democratic minority leader.

“The project in Manhattan … It’s billions and billions of dollars that Schumer has worked 20 years to get,” Trump said during an Oct. 15 news conference. “It’s terminated. Tell him it’s terminated.”

Regardless of the cause, the money dried up around Feb. 6, and about 1,000 workers suddenly found themselves without a job.

Both the Gateway Commission and New Jersey and New York sued in separate filings.

The states claimed the move was “arbitrary and capricious, contrary to law, and without observance of procedure required by law,” according to court filings.

“Specifically, plaintiffs claim that the September 30 suspension violates federal regulations that dictate precisely whether, when, and how agencies can suspend disbursements of obligated grants,” the filings said.

The same day crews walked off, Vargas sided with the states and issued a temporary restraining order that blocked the shutdown and required the Trump administration to immediately release more than $200 million in withheld funds.

The court said the funding freeze was illegal and that stopping work would cause “immediate and severe” economic harm.

The 2nd U.S. Circuit Court of Appeals declined to block Vargas’ order, and construction started back up on Feb. 13.

The commission said the project, which is slated for completion in 2035, was on schedule before the stoppage and has made “significant progress” since then.

Months later, the DOT still has not made any determination about whether the work conforms to hiring and labor practices, despite its initial statements.

The department did not directly respond to a request for comment.

Instead, an anonymous spokesperson wrote in an email that the agency “remains committed to ensuring hardworking taxpayer dollars are being spent responsibly and do not fund unconstitutional, discriminatory contracting practices.”

Vargas’ ruling isn’t the end of all litigation pertaining to the tunnel; the Gateway commission’s own suit, which reportedly seeks damages incurred because of the shutdown, still remains.

The commission did not comment on that lawsuit on Wednesday.