Federal Government Begins Releasing Funds for Hudson Tunnel Project

After court order, $30 million in overdue funds are released for the $16 billion infrastructure project.

Published on Feb. 14, 2026

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The federal government has begun releasing $30 million in overdue funds for the Hudson Tunnel project, following a court order that required the release of more than $200 million that had been withheld by the Trump administration since last October. The funds were released after the U.S. Court of Appeals for the Second Circuit declined to overturn a lower court ruling that the government must release the money while the case is being tried.

Why it matters

The Hudson Tunnel project is a critical infrastructure initiative that will build a new rail tunnel under the Hudson River, connecting New York and New Jersey. The release of these federal funds is crucial to keeping the $16 billion project on track after construction was paused due to the lack of funding.

The details

The Department of Transportation released the initial $30 million on Friday, February 13, 2026, with the full $205 million in reimbursement funds expected to be provided. Work on the tunnel had halted on February 6 as the Gateway Development Commission, which oversees the project, said it had exhausted its credit while awaiting the federal money. The federal government had committed to providing 70% of the funds for the project, with New York and New Jersey splitting the remaining 30%.

  • On February 6, 2026, construction on the Hudson Tunnel project was paused due to lack of federal funding.
  • On February 13, 2026, the Department of Transportation released the first $30 million in overdue funds for the project.

The players

Gateway Development Commission

The organization that oversees the $16 billion Hudson Tunnel project.

Kathy Hochul

The Governor of New York, who stated that while the $30 million release is progress, full funding must be restored.

U.S. Court of Appeals for the Second Circuit

The appeals court that declined to overturn a lower court ruling requiring the federal government to release the overdue funds.

Jeannette Vargas

The U.S. District Court Judge who ruled that the government must release the funds while the case is being tried.

Trump administration

The previous federal administration that had been withholding the more than $200 million in funds for the project.

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What’s next

The judge in the case will decide on when the remaining $175 million in overdue funds will be released by the federal government.

The takeaway

The release of these federal funds is a critical step in keeping the Hudson Tunnel project, a major infrastructure initiative connecting New York and New Jersey, on track after construction was halted due to the lack of promised federal financing.