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The basics:

• More than $205M in frozen federal funding released for Gateway Tunnel project
• US Court of Appeals decision allows payments to resume while legal fight continues
• Gateway Development Commission confirms construction to restart next week
• Project supports about 1K workers, is critical to Northeast Corridor economy

Officials in New Jersey and New York said more than $200 million in frozen federal funding for the Gateway Tunnel Project is once again flowing, after a federal appeals court declined Feb. 18 to block a lower court order requiring the Trump administration to resume payments.

As NJBIZ has reported, the decision by the U.S. Court of Appeals for the Second Circuit leaves in place a temporary restraining order directing the release of the funds. That clears the way for suspended construction work to restart as soon as next week while the broader legal fight continues. (See a timeline of events below.)

The funding freeze halted activity on a project that supports roughly 1,000 workers. Additionally, the program expects to add thousands more jobs as it moves along. It is considered the nation’s most critical infrastructure project, and a central part of the future of the Northeast Corridor. About 200,000 daily commuters use the rail corridor, which spans a region responsible for roughly 20% of the nation’s GDP.

Officials warned that prolonged delays could add millions in costs to a project that was on time and on budget. Meanwhile, it also could also jeopardize jobs and health care for workers sidelined by the stoppage.

Back to work

“Gateway Development Commission (GDC) 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,” the GDC said in a statement. “We are working with our contractors to deploy these funds to resume work as soon as possible. Letters will be sent to contractors today, and construction activities are expected to resume next week. We continue to pursue all avenues to secure access to the full amount of federal funding for the Hudson Tunnel Project, including our lawsuit.”

The federal government released the first batch of funds last week. The rest processed this week, following the holiday. Now, that $205 million is fully restored.

Following an unrelated event in Flemington, Gov. Mikie Sherrill was asked about the situation. She confirmed that funding is flowing again. She also spoke about the critical importance of Gateway.

Gateway Tunnel battle: A timeline

• Oct. 15, 2025: Trump declares $16B Hudson Tunnel Project terminated
• Feb. 2: GDC sues federal government over funding freeze
• Feb. 3: NJ, NY sue Trump administration over funding
• Feb. 6: Hudson Tunnel Project halted
• Feb. 6: Court blocks Trump funding freeze
• Feb. 12: Appeals court declines to block $200 million in funding
• Feb. 16: Trump, Sherrill spar over Gateway funding freeze

“This is a project that had about 1,000 people already employed. It could lead to almost 100,000 jobs in the region,” Sherrill told reporters. “It has a huge economic impact of about $20 billion. And this is an area of the country responsible for about 20% of the nation’s GDP. So really, a huge jobs and economic driver. Not to mention the 200,000 commuters that take the tunnel every day to fuel a lot of business throughout the region.

“So, the fact that the President of the United States, who, you know, has some pretty big economic and jobs challenges that he’s facing, would then further hit the economy like this, was bewildering and illegal. We took him to court because I care deeply about jobs and the economy, even if the federal government doesn’t seem to,” Sherrill continued.

“So, I took him to court: we won. He fought it again: we won. We have seen the funds released and he continues to remain in court. But we’re just seeing again and again that what he’s doing is illegal. And the worst part about it is now, he’s probably cost the project, which was on time and on budget, millions of dollars by halting all this work. He’s put a lot of workers at risk, who had to go home and tell their family they think they’re out of a job, who worried about their health care,” the governor said.

“As you know, any delay in health care, especially if you have some sick kids – and I was speaking to some workers who did – it’s all really horrible hits. Every single time Trump gets involved, the only person who seems to be making any money is him, at the expense of workers across the country.”

The Trump administration did not immediately respond to a request for comment.