New York, New Jersey sue feds over Hudson Tunnel funding cuts

By Christen Smith
The Center Square

New York and New Jersey are taking the Trump administration to court over its move to “illegally” claw back $15 billion in federal funding for the Gateway Tunnel Project, accusing the president of engaging in “political retribution.”

In a lawsuit filed late Tuesday in U.S. District Court in Manhattan, New York Attorney General Letitia James and acting New Jersey Attorney General Jennifer Davenport claim the U.S. Department of Transportation’s decision to withhold the funding was not because of noncompliance with laws but because the President Donald Trump is “engaged in political retribution” against the states.

“Suspending the funding for this monumental project based on the president’s desire to punish political rivals violates the Administrative Procedure Act many times over,” the AGs wrote in the 29-page complaint.

“At risk, of course, is the completion of this much-needed project on which a substantial proportion of the nation’s economy depends,” they wrote. “Also hanging in the balance are the livelihoods of thousands of people who are working on the project and the futures of the numerous businesses contracting with Gateway Development Commission to complete the project.”

The legal challenge follows a lawsuit filed Monday in the U.S. Court of Federal Claims by the Gateway Development Commission, a multistate group overseeing the project. The commission’s complaint called the move “arbitrary and capricious” and asked the court to release “contractually obligated” grant and loan funds for the Hudson Tunnel Project that were pulled back by DOT.

Lawyers for Gateway said work at the project’s five sites in Manhattan and northern New Jersey will likely have to stop by Friday unless the federal government releases the funding.

“Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk,” James said in a statement. “Our tunnels are already under strain and losing this project could be disastrous for commuters, workers, and our regional economy. We are taking the administration to court to prevent a shutdown that would ripple far beyond New York and New Jersey.”

The cuts were announced in October by Office of Management and Budget Director Russell Vought, who said $18 billion in funding for the Hudson Tunnel and the Second Avenue Subway project is “under administrative review” to determine if “to ensure funding is not flowing based on unconstitutional [diversity, equity and inclusion] principles.”

“The Department is focusing on these projects because they are arguably the largest infrastructure initiatives in the Western Hemisphere, and the American people want to see them completed quickly and efficiently,” DOT Secretary Sean Duffy said in a statement at the time.

Trump has targeted his former state with federal funding cuts in response to top Democrats’ pushback over immigration crackdowns, a rollback of transgender protections and other divisive White House policies. He has also blamed top New York Democrats like Sen. Chuck Schumer for shutting down the government last year in a fight over federal health care subsidies.

“Donald Trump’s revenge tour on New York threatens to derail one of the most vital infrastructure projects this nation has built in generations, putting thousands of union jobs and billions of dollars in economic benefits in jeopardy and threatening the commutes of 200,000 riders,” Democratic Gov. Kathy Hochul said in a statement. “My message to Donald Trump and Sean Duffy is simple: we’ll see you in court.”

The Gateway project, years in the making, calls for renovating the 1910 tunnel, which carries about 200,000 weekday passengers on Amtrak and NJ Transit beneath the Hudson between New Jersey and Manhattan. It’s expected to be completed by 2035. New York and New Jersey agreed last year to split the 30% local share of tunnel construction costs, a move required to apply for federal funding.

The upgrades are aimed at doubling the capacity of the Northeast Corridor train line between Newark and New York City — which state and federal officials say will improve rail mobility from Washington, D.C., to Boston and other destinations. They also say it will ease a bottleneck of rail traffic coming to and from the city, which is projected to worsen if renovations aren’t completed.