New York tunnel project expects to receive frozen US funding after court order

The $16 billion Hudson Tunnel Project will resume construction after a federal appeals court upheld a lower court ruling to release $205 million in frozen federal funds.

Published on Feb. 13, 2026

Got story updates? Submit your updates here. ›

The commission overseeing the $16 billion Hudson Tunnel Project in New York said it expects to soon receive $205 million in frozen federal funding after a U.S. appeals court did not undo a lower court order that required the federal government to release the funds. The funding freeze had forced a halt to construction last week, putting 1,000 workers out of work.

Why it matters

The Hudson Tunnel Project is critical infrastructure that will overhaul the rail connection between New York and New Jersey, which is the nation's most heavily used passenger rail line. The existing century-old tunnel was heavily damaged by Hurricane Sandy in 2012 and requires frequent emergency repairs that disrupt travel.

The details

Last week, U.S. District Judge Jeannette Vargas issued a preliminary injunction that required the federal government to release the $205 million in funds that had been frozen by former President Donald Trump since October 1. The Second Circuit U.S. Court of Appeals upheld Vargas' ruling, allowing the funding to be released so construction can resume.

  • On October 1, 2025, the federal government froze $205 million in funding for the Hudson Tunnel Project.
  • On February 5, 2026, U.S. District Judge Jeannette Vargas issued a preliminary injunction requiring the federal government to release the frozen funds.
  • On February 12, 2026, the Second Circuit U.S. Court of Appeals upheld Vargas' ruling, allowing the $205 million in funding to be released.

The players

Gateway Development Commission

The commission overseeing the management and construction of the Hudson Tunnel Project.

Jeannette Vargas

A U.S. District Judge who issued a preliminary injunction requiring the federal government to release $205 million in frozen funds for the Hudson Tunnel Project.

Letitia James

The New York Attorney General who said the Trump administration must immediately release funding for the Hudson Tunnel Project.

Donald Trump

The former President who froze $205 million in federal funding for the Hudson Tunnel Project.

Joe Biden

The former President who allocated about $15 billion in federal support for the Hudson Tunnel Project.

Got photos? Submit your photos here. ›

What they’re saying

“This administration never had the authority to freeze this funding, and it no longer has any excuse to delay.”

— Letitia James, New York Attorney General (Reuters)

“While this is a positive step, we need consistent, reliable access to the Hudson Tunnel Project's federal funding moving forward.”

— Gateway Development Commission (Reuters)

What’s next

The Gateway Development Commission is working with contractors to plan how to deploy the released funds and resume construction as soon as possible.

The takeaway

The court order to release the frozen federal funding for the critical Hudson Tunnel Project is a significant victory, allowing construction to resume after a temporary halt that put 1,000 workers out of a job. This project is essential infrastructure for the heavily used rail connection between New York and New Jersey, and the release of funds will help ensure the tunnel can be repaired and upgraded.