NEW YORK – In a significant legal move, New York City’s Metropolitan Transportation Authority (MTA) filed a lawsuit against the Trump administration on Tuesday. The lawsuit alleges a breach of contract over the withholding of nearly $60 million in federal funds earmarked for new subway stations in Manhattan.

This lawsuit marks the latest chapter in an ongoing series of legal confrontations between federal authorities and officials from New York and New Jersey. The disputes revolve around funding for critical transportation infrastructure projects, including the ambitious reconstruction of New York’s Penn Station, the development of a new rail tunnel connecting the two states, and the implementation of a groundbreaking congestion pricing scheme for drivers entering Manhattan’s most congested areas.

Filed in the Court of Federal Claims in Washington, the lawsuit contends that the U.S. Department of Transportation has held back over $58.6 million since last year’s announcement of a funding suspension for the Second Avenue subway extension project. According to the lawsuit, further financial obligations are expected to accrue soon.

The total cost of the subway extension project is projected at $7.7 billion, with the federal government originally slated to contribute approximately $3.4 billion. The lawsuit claims that without these federal funds, the MTA has been forced to reallocate resources from other areas, warning that a prolonged suspension could eventually bring the project to a standstill.

New York Governor Kathy Hochul has voiced concern over the potential repercussions, stating that the suspension puts the “entire project at risk.”

“Yet again, New York finds itself compelled to take legal action against the Trump Administration to prevent the abrupt withdrawal of billions in previously committed infrastructure funding,” Governor Hochul said in a statement.

In response to the lawsuit, the federal DOT said it is “committed to ensuring hardworking taxpayer dollars are being spent responsibly. We are considering all legal avenues.”

The Republican administration announced in October a hold on $18 billion in funding for the subway extension as well as the new tunnel beneath the Hudson River, citing a government shutdown and the administration’s belief that funding was being unconstitutionally spent based on diversity, equity and inclusion principles.

A federal judge in February ordered the administration to restore funding to the tunnel.

The first section of the long-planned Second Avenue line opened in 2017 with new stations on the Upper East Side. The new project would add three stops to extend the line into East Harlem