UPDATE: Hudson Tunnel Project to resume construction after funding was fully disbursed by federal government

Updated 02/23/2026

On Feb. 18, the Gateway Development Commission (GDC) was fully reimbursed the $205 million in federal funding it needed to continue work on the Hudson Tunnel Project (HTP). Construction is expected to resume on the project this week. 

“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 GDC said in a statement. 

New York Gov. Kathy Hochul issued a statement, noting the development is a “big win” for the state of New York. 

“For months, Donald Trump illegally suspended funding for the Gateway Tunnel, putting the most important infrastructure project in the nation in jeopardy,” Hochul said. “Today—after our preliminary court victories and repeated conversations with the President about the need to keep funds flowing—we secured a major result: The federal government released the remaining $98 million in overdue funding to Gateway and provided an additional $30 million in reimbursements for work completed in January. 

This afternoon, the Gateway Development Commission will notify contractors to prepare to resume work next week. Many of the 1,000 union workers I stood with yesterday, whose livelihoods were put at risk by the President’s actions, will soon be back on the job.I have told the President repeatedly that when he targets New York, we will fight back, and we will not back down. Today’s progress is significant, but we need certainty that Gateway funding will remain in place for the duration of the project. The federal government has a legal obligation to fully fund Gateway, and New York will accept nothing less.” 

New Jersey Gov. Mikie Sherrill said the delay in the project will likely mean the budget of the project went up. 

“[President Trump] has probably cost the project, which was on time and on budget, millions of dollars by halting all this work. He’s put a lot of workers at risk, who had to go home and tell their family they think they’re out of a job, who worried about their healthcare,” Sherrill said. 

The Regional Plan Association (RPA) noted in a statement that while they’re happy the project is back on, work needs to begin immediately. 

“RPA welcomes the release of committed federal funding for the Hudson Tunnel Project. The full reimbursement of $205 million owed by the federal government is paid and is available to the Gateway Development Commission to restart construction on this vital project. RPA urges all parties to ensure that the funding for the Hudson Tunnel Project is both consistent and reliable. Our regional economy should not have to suffer the catastrophic commuter challenges that a tunnel shutdown would cause, and any delay makes that outcome more and more likely. Every day this project is delayed, costs go up, and our region moves closer to a preventable crisis in transportation capacity and safety. The sooner Gateway is built, the sooner modern, resilient infrastructure will expand capacity, strengthen reliability and support millions of riders and businesses in the region.”

Updated 02/17/2026 

On Feb. 13, the federal government began disbursing the funds for the HTP. As of now, $30 million of the contractually obligated $205 million in funds have been disbursed.  

In a statement, the GDC says that while some of the money has been disbursed, “construction remains paused for now, and we are working with our contractors to plan how to deploy these funds in the most effective way and get workers back on the job to resume some construction as soon as possible. 

Despite the disbursement, President Donald Trump is still opposed to the project, calling it “boondoggle” on Truth Social. 

Gov. Sherrill responded to the President’s claim in a statement, saying, “The only person who can make Gateway a boondoggle is Donald Trump. Until his illegal actions forced the project to shut down, threw 1,000 hard-working men and women off the job and threatened the commutes of 200,000 people a day, Gateway was on time and on budget. Donald Trump’s ridiculous political rhetoric is just another effort to get out of paying what the federal government owes to the most urgent infrastructure project in the country. We won’t let him. We’ll keep taking him to court, and we’ll keep winning, until the Gateway Tunnel’s entire funding is once again secured.” 

Construction paused Feb. 6 on the HTP after the federal government did not release the $205 million in disbursements to the GDC that is contractually obligated to fund the project. The Trump Administration froze funds for the project on Oct. 1, 2025. 

Ahead of work pausing on the project, the GDC, which was created in 2019 by the states of New York and New Jersey as a special purpose entity to build the projects of the Gateway Program, including the HTP, filed a lawsuit against the federal government. 

Hours after construction was paused, New York Attorney General Letitia James issued a temporary restraining order to prevent construction from being paused, according to a report from CBS News New York. 

On Feb. 9, Judge Jeannette Vargas granted a short administrative stay until Feb. 12 at 5:00 p.m. local time for the federal government to unfreeze the funds if it isn’t successful in convincing the Second Circuit Court of Appeals that it should be able to withhold the money, according to a report from CNN. 

Gov. Hochul issued a statement on Vargas’ ruling, saying, “Today, a judge affirmed what we’ve said from the start: Our case against the Trump Administration is likely to succeed, and Donald Trump’s attempt to rip away funding and derail the Gateway Tunnel project is likely to be found unlawful. This ruling is a victory for the thousands of union workers who will build Gateway and the hundreds of thousands of riders who rely on it every day. We will work to protect this decision and move as soon as possible to get work back on track. We will continue coordinating with our partners at the Gateway Development Commission and New Jersey to ensure the administration follows the law and releases the funding New Yorkers are owed.” 

In a statement to Mass Transit magazine, a GDC spokesperson confirms that even though the temporary restraining order was issued, “construction will remain suspended until federal funding disbursements resume. GDC continues to pursue all avenues to regain access to the federal funds for this urgent project, including our lawsuit.” 

According to CNN, the Trump Administration told Senate Minority Leader Chuck Schumer (D-NY) in January that they would release the funds for the project if Shumer agreed to rename New York’s Penn Station and Washington’s Dulles International Airport after the president.  

Schumer responded on X, saying the claim is an “absolute lie” and that only one person can restart the project “in the snap of a finger.” 

Tom Wright is the president and CEO of the RPA, one of the oldest independent metropolitan research, planning and advocacy organization in the U.S. He notes the project is at a delicate point. 

“This is uncharted waters,” Wright said. “This is not as simple as on Thursday this is done. “My understanding is that these contracts and grants have all kinds of requirements in them that if the administration wants to, they [can] keep delaying and denying things.” 

Wright notes the longer construction is halted, the more likely it is that the project is not only behind schedule, but behind budget. 

“A question in my mind is at what point do bids on the project need to be rebid and renegotiated?” Wright said.  

Gov. Sherrill says the state “will continue to pursue full relief so the nation’s most urgent transportation project can keep moving forward and workers can keep putting food on the table.” 

Mass Transit magazine will continue updating this story as more information becomes available.