NJ & NY Sue Trump Administration for Withholding Gateway Funding

On Feb 4, 2026

New Jersey and New York announced they are suing the Trump administration for illegally withholding $15 billion in federally committed funding for the Gateway project to provide new tunnels and rehabilitate the existing vital Hudson River rail crossing between northern New Jersey and New York City. If additional funding isn’t available by this coming Friday, Feb. 6, construction on the tunnel will stop, resulting in the loss of 1,000 jobs.

The lawsuit, filed in federal court in the Southern District of New York, seeks emergency relief to stop the U.S. Department of Transportation (DOT) from continuing to implement its indefinite funding freeze—funds needed to ensure that active construction on the project can continue. It follows the lawsuit filed on Monday by the Gateway Development Commission against the federal government for the same reasons.

At a press conference at Newark Penn Station this afternoon, Gov. Mikie Sherrill said that the Trump administration’s move to cancel the Gateway funds is “arbitrary, capricious and illegal … and I refuse to let it happen.”

“For President Trump this is just about politics,” Sherrill continued. “It’s him using this … to hold up progress in a political fight. As usual, whenever he gets involved, costs go up and New Jerseyans get hurt.”

She said that Gateway is the nation’s most urgent infrastructure problem, but that the Trump administration has consistently moved the goalpost farther away even after the work has already started.

During the federal government shutdown in the fall, President Trump declared he would “terminate” money allocated for the project. The primary stated reason was that the administration needed to review the project’s contracts to ensure they did not comply with “unconstitutional” DEI principles regarding disadvantaged businesses.

Gateway leaders claim they have submitted all the documents requested as part of that review, but criticized the federal government for moving the goalposts.

Last week, a White House spokesperson indicated in a statement that the money would continue flowing if Democrats in Congress agreed to fully fund the Department of Homeland Security.

“First it was about the fact that they didn’t like the federal Disadvantaged Business Enterprise (DBE) requirements. Then it was about the fact that they were saying we weren’t fulfilling the DBE requirements. Now it’s about Department of Homeland Security funding,” Sherrill said. “So again and again, the goalposts are being moved, which is why we are going to court.”

New Jersey acting Attorney General Jennifer Davenport said the lawsuit is straightforward: “The Trump administration cannot unlawfully freeze billions of dollars it owes for the Gateway project. So, New Jersey and New York are jointly suing in the Southern District of New York to demand that the U.S. Department of Transportation stop this illegal suspension of funds.”

Davenport said the decision to suspend all project funds violates the law in multiple ways: “It violates careful federal regulations that limit whether and when agencies can freeze project funds; it violates requirements that federal agencies have to give valid reasons for the decisions they make; and it reflects an unlawful effort by the president to punish political rivals by holding up this critical project.”

As to the point of punishing political rivals, Davenport said that Trump “publicly announced that Gateway is, quote, ‘Terminated because the Democrats are so foolish’ and [he] added, ‘There is no funding, because it’s up to me.’ … That should offend every American, and it’s hard to hear if you’re scheduled to lose your job this weekend,” Davenport said.

She said the state is seeking emergency relief by Friday, and other relief later this month, to ensure construction continues, keeps 1,000 people who now work at the site employed.

To access more business news, visit NJB News Now.

Related Articles: