New York Construction Report staff writer
The battle over federal funding for the Gateway Program intensified this week as New York and New Jersey pressed forward with a federal lawsuit against the Trump Administration and business and labor leaders from across the construction industry urged the White House to immediately release frozen funds to avoid a shutdown of active work.
On Feb. 3, New York and New Jersey filed suit in U.S. District Court for the Southern District of New York seeking emergency relief to block the U.S. Department of Transportation (DOT) from continuing an indefinite freeze on federally approved funding for the Hudson Tunnel Project, the central component of the Gateway Program. State officials warn that without court intervention, construction could be forced to stop as early as Feb. 6.<
The following day, Feb. 4, leaders from the construction, engineering, real estate, labor, and transportation advocacy sectors sent a joint letter to President Trump calling for the immediate release of funds, warning of a “catastrophic work stoppage” if funding is not restored.
“Gateway is the most urgent infrastructure project in the nation,” the letter states, describing the Hudson Tunnel Project as essential to economic growth, job creation, and long-term competitiveness across the Northeast Corridor, which supports roughly 30 percent of U.S. jobs and 20 percent of national GDP.
The Hudson Tunnel Project includes construction of a new two-track rail tunnel beneath the Hudson River and rehabilitation of the existing 116-year-old North River Tunnel, which was heavily damaged during Superstorm Sandy. Construction began in 2023 and is currently underway at multiple active sites in New York and New Jersey.
According to the states, the Trump Administration halted federal funding on Sept. 30, suspending millions of dollars in reimbursements that Congress had already approved. New York and New Jersey have continued covering construction costs using limited operating funds but say those resources will be exhausted within days.
“There are currently five active projects with 1,000 workers that would be out of work immediately in the event of a pause in construction,” the Feb. 4 letter states. Over the life of the Gateway projects, construction is expected to generate approximately 95,000 jobs and $19.6 billion in economic activity.
Gov. Kathy Hochul said the funding freeze threatens a generational infrastructure investment.
“This illegal effort by the Trump Administration puts one of the most vital infrastructure projects this nation has built in generations in jeopardy,” Hochul said.
New Jersey Gov. Mikie Sherrill warned that stopping work would have immediate consequences for workers and commuters.
“If this project stops, 1,000 workers will immediately lose their jobs, and hundreds of thousands of commuters will lose the chance at finally having reliable rail service,” she said.
New York Attorney General Letitia James said allowing the project to stall would place one of the nation’s most heavily used transit corridors at risk.
“Our tunnels are already under strain and losing this project could be disastrous for commuters, workers, and our regional economy,” James said.
The states argue that a construction shutdown would also force them to incur millions of dollars to secure partially completed sites, prevent public safety hazards, and manage demobilization and restart costs that would significantly drive up the overall project price.
Industry leaders echoed those concerns in their letter, warning that any pause would disrupt specialized crews and equipment, inflate costs, and jeopardize years of planning and coordination. The letter also emphasized that Gateway is currently on schedule and under budget.
The Feb. 4 letter was signed by senior leaders from major construction, engineering, labor, and development organizations, including:
- John T. Evers, PhD, President and CEO, American Council of Engineering Companies
- Felice Farber, Executive Director, Subcontractors Trade Association
- Joe Fiordaliso, President, ACEC New Jersey
- Mike Hellstrom, Vice President and Eastern Regional Manager, Laborers’ International Union of North America
- Gary LaBarbera, President, Building & Construction Trades Council of Greater New York and Vicinity
- Jesse Lazar, Executive Director, American Institute of Architects New York
- Mark Jackson, Government Affairs Committee Chair, NAIOP NYC Metro
- Dan Kennedy, CEO, NAIOP New Jersey
- Greg Lalevee, Business Manager, International Union of Operating Engineers Local 825
- David P. Rible, CEO, Utility Transportation Contractors Association
The states contend the funding freeze is unlawful and politically motivated, arguing that federal law prohibits withholding congressionally approved funds without a valid legal basis. They are seeking a preliminary injunction to compel DOT to resume funding while the case proceeds.
The lawsuit is separate from a legal action filed by the Gateway Development Commission, which oversees the project. Together, the legal challenges and industry pressure underscore the growing urgency to keep construction moving on one of the most consequential infrastructure projects in the United States.
The U.S. Department of Transportation has not publicly responded to the lawsuit or the industry letter.
