Listen to this articleThe basics:
- Federal shutdown halts $18B in Hudson Tunnel funding
- USDOT reviewing DEI-based contracting practices for the project
- Gateway Development Commission continues planning and compliance
- Delays impact NJ jobs, regional economy & construction timeline
As the federal government shutdown continues, there is a new front in the fight that could have a particularly major impact on New Jersey.
Office of Management and Budget Director Russ Vought posted on X Oct. 1, adding another layer of intensity to the back-and-forth. Vought revealed that roughly $18 billion in New York City infrastructure projects were put on hold, “to ensure funding is not flowing based on unconstitutional DEI principles.”
He added in a second post: “Specifically, the Hudson Tunnel Project and the Second Ave. Subway.”
Of course, this has a direct impact on New Jersey, which is partners with New York and other key stakeholders on the Hudson Tunnel Project.
Given the timing, the action was widely seen as a way to increase pressure on and punish New York lawmakers at the center of the federal funding fight – Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y.-8th District, along with the Democratic congressional delegation.
Under investigation
Following those posts, which hinted that more information would come from the U.S. Department of Transportation, the agency issued an interim final rule barring race- and sex-based contracting requirements from federal grants.
As NJBIZ has reported, the $16 billion Hudson Tunnel project – the nation’s largest infrastructure project – has secured more than $11 billion in federal funding.
“Secretary Duffy’s position on the DBE [Disadvantaged Business Enterprise] program is clear – subsidizing infrastructure contracts with taxpayer dollars based on discriminatory principles is unconstitutional, counter to civil rights laws, and a waste of taxpayer resources,” the USDOT said in a statement. “USDOT issued letters to New York to inform them that their two mega projects – the 2nd Avenue Subway and Hudson Tunnel – are under administrative review to determine whether any unconstitutional practices are occurring.
“The Department is focusing on these projects because they are arguably the largest infrastructure initiatives in the Western Hemisphere, and the American people want to see them completed quickly and efficiently.”
The agency said until it completes its review, it cannot process project reimbursements. It noted that federal funding for the HTP and Second Avenue Subway projects totals nearly $18 billion.
“Thanks to the Chuck Schumer and Hakeem Jefferies shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time. Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review,” the statement continued. “This is another unfortunate casualty of radical Democrats’ reckless decision to hold the federal government hostage to give illegal immigrants benefits.”
Major development
The Gateway Development Commission, which oversees the HTP project, released the following statement:
GDC has received notification from FTA [Federal Transit Administration] regarding a pause in disbursements for the Hudson Tunnel Project. GDC complies with all federal laws and regulations, and will continue to do so throughout the project. We look forward to continuing our productive relationship with the Administration, FTA, FRA, and the US Department of Transportation. In the meantime, we remain focused on keeping the project on scope, schedule, and budget.
The action comes just one day after a major positive development for the work.
At its Sept. 30 meeting, the GDC Board of Commissioners expanded its delivery partner model agreement with MPA Delivery Partners, a joint venture of Mace, Parsons and Arcadis. The board announced the award of a $665 million, five-year contract extension for the critical project, which is slated to begin tunnel boring in the coming months.
Schumer wrote on X, “Trump and Vought are threatening the vital Gateway Tunnel and Second Ave Subway. That royally screws commuters. Obstructing these projects is stupid and counterproductive because they create tens of thousands of great jobs and are essential for a strong regional and national economy.”
Candidates weigh in
The issue has also found its way into the gubernatorial race.
“I first ran on a promise to build the Gateway Tunnel, and I delivered. We proudly secured a full funding agreement,” said U.S. Rep. Mikie Sherrill, also the Democratic candidate for governor, in a statement. “Shovels are in the ground. The first part of the project is set to be completed in 2026. During construction alone, Gateway will create 95,000 jobs and generate $42.8 billion in economic activity in our region.
“Yet, once again, the Trump administration is targeting New Jersey by gutting this funding.”
Sherrill criticized her opponent, Republican Jack Ciattarelli, saying he has not named any areas of disagreement with Trump — and has said he will never sue the Trump administration.
“He will choose Trump over New Jersey every time,” Sherrill alleged of her opponent. “Make no mistake: When I’m governor, I will see them in court and deliver Gateway for New Jersey.”
The Ciattarelli campaign has not yet weighed in publicly on the Hudson Tunnel Project funding freeze.
“During his first term in office, I was proud to work with President Trump to advance the Gateway Program – specifically the construction of the Portal North Bridge – to upgrade our region’s century-old transportation system,” Gov. Phil Murphy told NJBIZ in a statement. “With millions of commuters depending on the Hudson Tunnel Project and tens of thousands of jobs on the line, I’m confident that we’ll be able to work with the Trump Administration to keep Gateway moving forward. A project of this importance should be above politics.”
Please stay with NJBIZ for the very latest on this developing situation.
