Second Avenue Subway funding to resume after lawsuit

Second Avenue Subway funding will resume. The Trump administration said it would release more than $58 million. The money had been withheld from the Metropolitan Transportation Authority for the New York subway extension. This is reported by the railway transport news portal Railway Supply.

The decision was set out in a U.S. Department of Transportation letter. It was sent just before a hearing scheduled for April 16 in the MTA lawsuit over the money.

The dispute centered on money the administration had held since Oct. 1. It was reviewing whether the MTA was complying with rules tied to disadvantaged-business contracts.

Why Second Avenue Subway funding was withheld?

As reported by Gothamist, the letter sent to MTA CEO Janno Lieber described “troubling information.” It said the MTA was considering race and sex in contract awards. It also said that approach conflicted with a 2025 executive order. At the same time, the letter said the MTA had met the administration’s requirements. It said the funding would resume.

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As Railway Supply reported in March, the Metropolitan Transportation Authority filed its case in the Court of Federal Claims. It argued that the government had “improperly refused to disburse” the $58 million. The withheld funds are part of the $3.4 billion committed for the $7 billion project.

MTA lawsuit and Second Avenue Subway Phase 2

“It shouldn’t have taken seven months and a lawsuit to get here,” Lieber said in an MTA statement, “but with the federal government’s concession today on the courthouse steps, the MTA can now confidently forge ahead with Second Avenue Subway Phase 2. The billion-dollar contract approved at our March Board meeting is being awarded and contractors are mobilizing right away.”

New York Gov. Kathy Hochul said in a social media post that the administration “backed down. The freeze is over.” She also called for the money to be released “immediately.”

DOT representative Danna Almeida said the agency’s actions assured taxpayers “their hard-earned dollars will not fund unconstitutional DEI [diversity, equity, and inclusion] initiatives … which historically cause project costs to balloon.”

Today’s decision followed an earlier DOT loss in another dispute over money withheld from the Hudson River Tunnel project. That case was brought by the states of New York and New Jersey. In a related Court of Federal Claims matter, the judge said the government had breached its contract by withholding the funds. He then dismissed the case as moot because the earlier ruling had already led to the release of the money.

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