A federal appeals court on Thursday declined to halt a lower court's order that requires the Trump administration to release the funding for the Gateway tunnel project connecting New York and New Jersey. 

The U.S. Court of Appeals for the 2nd Circuit's decision means the Trump administration will need to release the funds for now, but the court is expected to issue another ruling after hearing oral arguments in the case later this month.

“The Trump administration’s legal stay to avoid funding the Gateway Tunnel has expired,” New York Democratic Gov. Kathy Hochul posted to X. “Donald Trump needs to follow the law and get the project back on track immediately.” 

The ruling comes after U.S. District Judge Jeannette Vargas ordered the administration to resume funding last week after the Gateway Development Commission told contractors to pause its work on the project until funding resumes, according to The Hill.

The Transportation Department has argued that it paused the funding last year as part of a review to ensure the project is in compliance with federal regulations, but the judge ruled that the freeze itself likely violates federal regulation.

The $16 billion project is expected to build two new train tunnels under the Hudson River, which would connect to Penn Station in New York City.

The appeals court has scheduled oral arguments on the federal funding freeze for Feb. 23. 

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.