Q Line Update: Feds Restore Funding to Second Avenue Subway

Victory for the MTA in its battle to have federal funds for the Second Ave. subway unfrozen came unexpectedly just before a trial was about to begin in federal claims court.

| 19 Apr 2026 | 10:48

For the second time in two months, the Trump Administration has resumed funding on a multi-billion dollar mass transit project in New York City that it had sought to derail.

In the latest involving the Second Ave. subway, the U.S. Department of Transportation after a seven-month delay, last week suddenly decided to release $60 Million in funding for the second phase of construction of the Q train East Harlem extension from 96th and Second Ave. to 125th St. and Park Avenue. The letter came only hours before the MTA’s lawsuit to unfreeze the funds was slated to start in Federal Court of Claims in Washington DC.

The MTA eventually plans to bore 1.8 mile twin tunnels and build three new stations in East Harlem in the $7.7 billion Second Ave. Subway Phase 2 expansion.

Earlier, in February, the Trump Administration’s DOT lost its bid to halt the Gateway Project, a multi-billion rail project building new tunnels under the Hudson River connecting North Bergen, NJ, to Penn Station after New York and New Jersey filed a joint suit to restore funds.

As a result of that action, NJ Governor Mikie Sherrill said recently that mammoth boring machines needed to drill the tunnels were finally being assembled on the Jersey side. “Hundreds of pieces of the first tunnel boring machines are set to be assembled,” said Sherrill in mid-March. “The slurry wall, at the Hudson County Shaft, is finished creating the dry, protected shell where future work will proceed. And most important, 1,000 workers are back on the job. It’s a big deal.”

The MTA filed a 46-page federal lawsuit in March when it claimed the feds had refused to disburse the funds and had blocked the transit agency from even billing into the Federal reimbursement online system.

In a stunning development on the eve of the trial, attorneys for the federal government said that the DOT had completed a long-stalled review of the MTA’s contracting practices and found it to be in compliance.

“DOT has completed its review and is resuming the processing of reimbursement requests pursuant to normal procedures,” a U.S. Department of Transportation official wrote to the MTA in a letter attached to the court filing.

MTA chairman Janno Lieber said of the delay: “It shouldn’t have taken seven months and a lawsuit to get here, 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.”

In the letter, without any admission of fault, The US DOT announced the resumption of processing of reimbursement requests to the MTA for the second part, setting a contract for excavation for the 10 blocks south of 106th Street along Second Avenue, to the current 96th Street Q line station.

The change of heart came when the Trump administration initially disdained the practice of MTA contractors to include sex and race as part of their contracts, as part of its procedure. The state transit agency changed the process to conform to US DOT current standards.

A representative for USDOT, Deputy Assistant Secretary of Public Affairs, Danna Almeida, said the agency’s actions assured taxpayers that taxpayer dollars will not fund unconstitutional diversity, equity, and inclusion initiatives, which she stated would make project costs increase.

Up until last October, DOT honored MTA’s nearly 100 reimbursement requests. Then, the administration launched a review of MTA’s Disadvantaged Business Enterprise program. Office of Management and Budget director Russell Vought announced the White House would stop distributing the funds for both the Second Avenue Tunnel and the Gateway Tunnel from Penn Station to Hudson County NJ. The latter, turned into a lawsuit against the government by New Jersey and New York officials, who received the missing $200 million after a decision in their favor after a settlement in early February. That project is currently the largest infrastructure project in the United States with a projected cost of $30 million.

The MTA Second Ave. Subway Phase 2 expansion in projected to cost $7.7 billion.

“It shouldn’t have taken seven months and a lawsuit to get here, 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.” MTA Chairman Janno Lieber