NEW YORK — The Trump administration has lost another round in court over funding for the Hudson Tunnel rail project, with a federal appeals court rejecting the administration’s bid to halt payments.
Reuters reports a three-judge panel of the 2nd U.S. Circuit Court of Appeals ruled, in the suit brought by the states of New York and New Jersey, that if it agreed to lift a temporary restraining order, the federal Department of Transportation could suspend future payments, leading to a halt to construction “posing serious risk of injury and deterioration that the states, at considerable expense, will become responsible to safeguard against.”
New York Gov. Kathy Hochul noted the decision in a brief social media post, calling it “Another loss for Trump. Another win for New Yorkers.”
The Department of Transportation indicated it was considering a further appeal, Reuters reported, saying it was committed to ensuring taxpayer dollars “are being spent responsibly. We are considering all legal avenues” on taxpayers’ behalf.
The ruling upheld an earlier decision by U.S. District Judge Jeannette Vargas that had released funds withheld since October [see “Judge orders funds released …,” Trains.com, Feb. 7, 2026]. Work on the tunnel, which halted on Feb. 6 because of a lack of funds, has since resumed, but the Gateway Development Commission, which oversees the project, has warned it could stop again without assurance the project has access to the full $16 billion previously committed by the federal government [see “Hudson Tunnel work has resumed …,” March 10, 2026].
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