Trump admin releases Hudson tunnel funds it froze for months, allowing work to restart

Evan Simko-Bednarski, New York Daily News on Feb 18, 2026

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The $205 million held since October by the Trump administration in a political spat over the region’s largest infrastructure project has been restored, the Gateway Development Commission said Wednesday in a statement.

The money, part of nearly $15 billion earmarked by Congress for the construction of the $16 billion Hudson River Tunnel, was ordered temporarily restored by the courts last week.

“Gateway Development Commission has received the full reimbursement owed to us from the federal government and now has more than $205 million available to fund work on the Hudson Tunnel Project,” a spokesman for the commission said in a statement. “We are working with our contractors to deploy these funds to resume work as soon as possible.”

Work on the tunnel, which was still in its early stages, had ground to a halt earlier this month as the project’s last line of credit ran out amid the federal funding interference.

The GDC said Wednesday that it was in the process of restarting work at three currently dormant construction sites on both sides of the Hudson River by next week.

“Letters will be sent to contractors today, and construction activities are expected to resume next week,” the GDC spokesman said. “We continue to pursue all avenues to secure access to the full amount of federal funding for the Hudson Tunnel Project, including our lawsuit.”

Last week’s court orders restoring the funds are temporary, as two legal efforts continue to restore the funding in full.

One, a breach of contract suit brought by the GDC against the Trump administration, is working its way through the Court of Federal Claims in Washington, D.C. The other, in which New York State and New Jersey sued the Trump administration in Manhattan Federal Court, led to last week’s temporary restraining order against the funding freeze by the Trump administration.

“These funds should never have been withheld in the first place,” New York Attorney General Letitia James said in a statement. “We will remain vigilant to ensure this funding continues uninterrupted, so that workers and commuters are never again left in limbo by the president’s targeted and unlawful whims.”

Gov. Kathy Hochul called the funding’s restoration Wednesday “a major result,” while vowing to continue to push for all the congressionally approved billions.

“Today’s progress is significant, but we need certainty that Gateway funding will remain in place for the duration of the project,” she said in a statement. “The federal government has a legal obligation to fully fund Gateway, and New York will accept nothing less.”

The freeze began in the early hours of last year’s government shutdown, as the feds announced the tunnel project was not in compliance with a last-minute change to federal contracting rules.

In the months that followed, the White House variously claimed the funding freeze was due to Democratic policy positions and to New York Senator Chuck Schumer’s personal support for the tunnel’s construction.

Trump even proposed a restoration of funding if Schumer would support naming Penn Station and Dulles International Airport for the president, the Daily News and others reported earlier this month.

The president belatedly denied those efforts Monday in an online screed, calling the story “JUST MORE FAKE NEWS!” In the same post, Trump claimed the tunnel project — which had to deplete its contingency funds due to his funding freeze — will be plagued by “cost overruns.”

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