NEW YORK — The Metropolitan Transportation Authority has sued the federal government for withholding funds for the extension of the Second Avenue Subway, following a similar path to one that led to the release of money for the Hudson Tunnel project.
MTA CEO Janno Lieber announced the move while testifying at a City Council meeting, the news site amNY.com reports.
“Everybody knows the Trump administration has been withholding money for New York infrastructure projects,” Lieber said. “We intend to get every cent of what has been promised, and frankly, based on the agreements, what’s owed to New Yorkers. And we’re not afraid to fight for it in court.”
The New York Times reports the suit filed in the Court of Federal Claims in Washington says the government “agreed to provide but has improperly refused to disburse” more than $58 million out of the $3.4 billion the federal government has commited to the almost $7 billion project. The suit says the delayed disbursements risk creating “a ‘domino effect’ of cascading delays and inflated costs.”
The subway project will extend the Q Line subway from its current northern terminus at 96th Street and Second Avenue to 125th Street and Lexington Avenue, where it will connect to the 4, 5, and 6 subway lines, as well as Metro-North commuter rail service. The first contracts for the extension were awarded in January 2024, and utility relocation work is in progress, with the start of civil construction planned for this year.
New York Gov. Kathy Hochul said in a statement that the state “has been forced to sue the Trump administration to stop [it] from erratically shutting off billions of dollars in previously committed infrastructure funding,” and that the “unlawful funding pause has put this entire project at risk.”
Hochul also invoked the ongoing fight over Hudson Tunnel funding; “Just like Gateway, Donald Trump has two options: restore the money now, or wait for a judge to force him to.”
The government announced it was withholding funding for both projects last September, saying it was reviewing if they were in compliance with new rules regarding contracts for disadvantaged businesses [see “Trump administration freezes …,” Trains.com, Oct. 1, 2025]. The Gateway Development Commission, which oversees the Hudson Tunnel project, sued in the Court of Federal Claims in February, saying the government had breached its obligations by withholding previously obligated funds [see “Gateway Commission sues …,” Feb. 3, 2026]. The states of New York and New Jersey also filed suit, and a ruling in that case led to the release of the tunnel funds [see “Hudson Tunnel work to resume …,” Feb. 18, 2026].
Judge Richard A. Hertling of the Court of Federal Claims subsequently dismissed most of the Gateway case because the money had been paid, but did say the Department of Transportation had breached its contract [see “Judge dismisses most …,” March 13, 2026].
The MTA has said it has shown that it is in compliance with the contract rules. Its suit says the funding for both projects was withheld “to put political pressure” on Senate Minority Leader Chuck Schumer (D-N.Y.) during the fight over the shutdown of the federal government.
The U.S. Department of Transportation is “considering all legal avenues” in response to the suit, an agency representative said in a statement.
— To report news or errors, contact trainsnewswire@firecrown.com.
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