Gateway Tunnel funding: NJ awaits $205M or returns to court

New Jersey Gov. Mikie Sherrill said federal officials have made available the first $30 million of $205 million in federal funding needed to resume the Gateway Tunnel construction project.

Sherrill made the announcement close to 5:30 p.m., on her X account.

“The Trump administration has finally sent the first $30 million of the $200 million owed to the Gateway Tunnel,” she wrote. “This is just the first step. I’m not going to stop fighting until we get every dollar we’re owed and this project is complete.”

New Jersey and New York returned to U.S. District Court this afternoon after the states requested a status conference on the restoration of the funding.

Attorneys for New Jersey and New York returned to U.S. District Court this afternoon after the states requested a status conference on the restoration of the funding, said Michael Symons, a spokesperson with the New Jersey Attorney General’s Office.

U.S DOT officials told the court it has initiated some payments, but they are still processing and have not yet been received by the Gateway Development Commission, state officials said on background.

“Because of our efforts, the Department of Transportation is finally delivering the Gateway project funds it has been unlawfully freezing for months,” said Acting Attorney General Jennifer Davenport. “When we fight, we win. We will always stand up for the Gateway project, for New Jerseyans, and for our workers from attacks out of Washington, D.C.”

The judge ordered the U.S. Department of Justice to file a status report by 3 p.m. Tuesday on the federal government’s efforts to comply with the court order and disburse the funds, officials said.

“The courts have spoken and it’s time for our people to go back to work,” Sherrill said at a press conference Friday in the Secaucus Junction NJ Transit station. “Congress approved this money and it belongs to the American people.”

Gateway Development Commission officials said construction will remain paused until it receives the $205 million in funding.

“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,” officials said in statement. “We have received an initial disbursement of $30 million from the federal government and expect to receive the full $205 million in reimbursement funds.”

“We are working with our contractors to plan how to deploy these funds in the most effective way and get workers back on the job to resume some construction as soon as possible,” said Molly Beckhardt, a commission spokesperson.

The $16 billion Hudson River Tunnel Project will build two new tunnels and rehabilitate the existing rail tunnels. Boring the first tunnels through the Palisades in North Bergen was scheduled to start this year.

Sherrill is not declaring victory until all the funds are released.

“That is just a start, but we anticipate that what this court decision says is funds need to keep flowing,” she said. ”And if that’s not the case, we’ll be back in court.”

Sherrill was flanked by two members of Congress and dozens of union laborers. The workers were laid off when construction stopped on Feb. 6. She called on the Trump administration to let all the allocated funds flow.

Union workers, including Tracy Porter, a local 472 laborer, have been out of work since Feb.6.

Porter, 59, of Bethlehem, Pennsylvania, was working on the site in North Bergen where the first of two tunnel boring machines was scheduled to begin drilling through the Palisades.

He expressed hope the president would let them go back to work.

“I feel pretty confident like the rest of local 472 that the governor will keep fighting until its done and we can quit all this stalling and get back to work,” Porter said.

He also had a message for Trump that echoed the America first slogan he campaigned on.

“This is what he needs to focus his time on. Focus on the American people who voted for him, for all the things he claimed he was going to do.” Porter said. “Restore the funding and leave us alone.”

Sherrill criticized the Trump administration’s actions for the potential waste of $20 million a month if Gateway construction remains stopped, in addition to legal costs.

Other speakers referred to Trump’s demand that he would release the funding if Democrats agreed to support renaming New York City’s Penn Station and Dulles International Airport outside of Washington, D.C., for him.

U.S. Rep. Rob Menendez (D-8th Dist.) challenged Trump to come to New Jersey, look laid off workers in the eye and “tell them their future and our country’s future is less important than getting his name on a building. I guarantee he will not.”

“The right thing to do is get the funding released and let’s drive this to its conclusion,” he said. “Public transportation, public infrastructure belongs to all of us.”

A U.S. Court of Appeals declined to overturn a lower court ruling that ordered federal transportation agencies to restore funding frozen on Oct. 1, 2025. However, the larger funding issue is still before the courts.

The Appeals Court will hear arguments on Feb. 23 about a federal appeal of the Feb. 6 ruling by U.S. District Court Judge Jeannette A. Vargas. She ordered federal officials in President Donald Trump’s administration to release the funding.

That was in response to a joint suit filed on Feb. 3 by New Jersey and New York which sued the Trump administration. The state’s action came one day after a suit was filed by the Gateway Development Commission, which is overseeing tunnel construction. Both contend the federal government breached contracts it signed in 2024.

Multiple federal grants and loans for the Gateway totaling $12 billion were finalized and approved in 2024 by the Biden administration.

Lawyers for the two states filed papers asking Judge Vargas for a 14-day extension of her restraining order against the U.S. Department of Transportation and the Federal Transit Administration.

Menendez said that he was optimistic the two states would prevail based on other court challenges the administration has lost.

“There are multiple instances across the county of when the the president and his administration tried to withhold congressionally appropriated money,” the congressman said. “I expect them to keep on losing.”