New York and New Jersey sued the Trump administration on Tuesday over a $16 billion funding freeze that they said threatens an ongoing Hudson River rail-tunnel project. Attorneys for New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport filed the case in federal court in Manhattan, seeking a court order that would require federal payments to resume so construction would not be disrupted.
In their complaint, the states asked the judge to declare the funding suspension unlawful and to direct the administration to resume payments immediately, arguing that the project’s continued work depends on the federal funds staying in place. The states said the timeline is urgent and that construction that has been underway could be forced to stop as early as Friday.
The suit challenges a federal hold on the project’s funding that began in September, according to the filing described by the Associated Press. At the time, the administration cited a government shutdown as part of its reasoning, and White House budget director Russ Vought said on the social platform X that officials believed the spending was based on unconstitutional diversity, equity and inclusion principles. The U.S. Department of Transportation said it was reviewing “unconstitutional practices.”
The Associated Press reported that James, in a statement Tuesday evening, warned that allowing the project to stop would put a heavily used transit corridor at risk. James said the tunnels are already under strain and that losing the project could be disastrous for commuters, workers and the region’s economy.
The states said the new rail tunnel work includes connecting New Jersey and New York City, with the tunnel planned to carry Amtrak and area transit trains. The larger effort also includes repairing an existing 116-year-old rail tunnel that was damaged by Superstorm Sandy in 2012.
Work on the Hudson River tunnel project began in 2023, the Associated Press reported, and the effort is supported by the 2021 federal infrastructure law signed by Democratic President Joe Biden. The Associated Press also reported that the White House and the U.S. Department of Transportation did not immediately respond to requests for comment on Tuesday night.
The lawsuit adds to a growing legal challenge over the tunnel funding. A similar case had been filed Monday against the federal government by the Gateway Development Commission, a local panel that oversees the project, according to the Associated Press report.