Federal Funds Unfreeze for Gateway Rail Tunnel Project

After legal battles, the $16 billion project receives initial $30 million payment from the federal government.

Published on Feb. 14, 2026

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The Gateway Development Commission, the bistate agency overseeing the $16 billion Gateway rail tunnel project beneath the Hudson River, has received an initial $30 million disbursement from the federal government. This comes after a series of lawsuits filed by New York, New Jersey, and the Gateway Commission against the Trump administration for freezing federal funds for the project, which had led to a pause in construction and the layoff of 1,000 workers.

Why it matters

The Gateway rail tunnel project is a critical infrastructure initiative to rehabilitate and expand rail capacity between New York and New Jersey. The restoration of federal funding is a significant development that will allow construction to resume on this important regional transportation project.

The details

The Gateway Development Commission received the initial $30 million payment on the evening of February 13th, 2026, the first federal funds released since September 30th of the previous year. Construction on five project sites in New Jersey, New York, and Manhattan had been paused since February 6th due to the lack of federal funding, leading to the layoff of 1,000 workers. The release of funds comes after a series of lawsuits filed by New York, New Jersey, and the Gateway Commission against the Trump administration for illegally freezing the federal dollars.

  • On February 2nd, the Gateway Commission sued the Trump administration for breach of contract and to release the funds.
  • On February 3rd, New York and New Jersey filed a separate lawsuit against the Trump administration seeking a temporary restraining order.
  • On February 6th, a federal judge signed off on a 14-day temporary restraining order, and construction was paused that same day.
  • On February 12th, the deadline for the federal government to appeal the judge's decision passed with no intervention from the appeals court.
  • On February 13th, the Gateway Commission received the initial $30 million payment from the federal government.

The players

Gateway Development Commission

The bistate agency overseeing the $16 billion Gateway rail tunnel project beneath the Hudson River.

Jeannette Vargas

The federal judge assigned to the case in the U.S. District Court for the Southern District of New York.

Mikie Sherrill

The Governor of New Jersey who held a press conference declaring victory over the Trump administration's attempt to freeze the Gateway tunnel funds.

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What they’re saying

“GDC is grateful to New York and New Jersey for their support in restoring our access to the federal funding for the Hudson Tunnel Project.”

— Jake McNichol, Spokesman for the Gateway Development Commission

“We're here today to begin with because we won and we're going to keep on winning because it's illegal what the president did. It's way past time that the president releases the Gateway tunnel funds, he's illegally stopped them, the courts have spoken, and now it's time for people to get back to work.”

— Mikie Sherrill, Governor of New Jersey

What’s next

The Gateway Development Commission is working with contractors to plan how to most effectively deploy the $30 million in newly released federal funds and get workers back on the job to resume construction as soon as possible.

The takeaway

The restoration of federal funding for the Gateway rail tunnel project is a significant victory for the states of New York and New Jersey, allowing this critical infrastructure initiative to move forward after months of legal battles with the Trump administration over the frozen funds.