Trump administration officials have suggested they may scrap a two-year-old agreement to fund a nearly $13 billion proposed commuter rail tunnel under the Hudson River with an even mix of federal and state money.

The move could upend the plan for the Gateway tunnel, which is widely regarded as one of the nation's most urgent infrastructure projects.

A spokeswoman at the U.S. Department of Transportation signaled the agency's lack of support in response to a joint announcement last week from New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie pledging to repay $3.6 billion in federal loans to cover each state's share of the megaproject's cost.

The Port Authority of New York and New Jersey is also contributing $1.9 billion, which it plans to borrow from the federal government and repay.

The federal transportation spokeswoman said her agency now views those loans as part of the federal government's contribution to the tunnel, a position that appeared to break with past funding practices for large transportation projects, in which states often use federal loans to finance their share.

"I think it's a nonsensical position," said Scott Rechler, chairman of the think tank Regional Plan Association and a Metropolitan Transportation Authority board member. "The states are saying they are going to pay the loans back with interest. This is a project that can't get financed any other way."

The governors' announcement stated that NJ Transit and New York state would repay $1.9 billion and $1.75 billion federal loans, respectively, borrowed through the Department of Transportation's Railroad Rehabilitation and Improvement Financing program.

"The plan now seeks 100% of its funding from federal sources," the department's spokeswoman said, highlighting how the agency now appears to view those loans as akin to grants. "No actual local funds are committed up front. They propose the project is funded half in grants and half in loans. This is not a serious plan at all."

But transit experts said several large infrastructure projects around the country have drawn on RRIF loans and other low-interest federal debt programs, such as the Transportation Infrastructure Finance and Innovation Act, to cover state contributions for infrastructure while also tapping contributions from the federal government.

"This pulls the rug out from under the Gateway project and every other project like it in America," one transportation official told Crain's.

Business groups were also taken aback.

"I think it's just a poor reading of the facts," added Kathryn Wylde, president and CEO of the Partnership for New York City. "Unlike the federal government, states don't print money. They rely on loans, including federal infrastructure loans, that they can repay over time. Under no scenario does that diminish their obligation and contribution to the project."

A spokesman for the Gateway Development Corp., an entity comprised of members from Amtrak, New York and New Jersey organized to oversee the tunnel project and related infrastructure, expressed confusion with the Trump administration's position.

"Last week's announcement is consistent with the 50:50 federal/local framework, and was submitted in accordance with longstanding U.S. Department of Transportation guidelines," the Gateway spokesman said.

The Department of Transportation's new opinion on the financing programs is part of a pattern of lukewarm support for Gateway by the Trump administration. Earlier this year, the federal government pulled its representative from the Gateway Development Corp. board, and President Donald Trump's executive budget proposal earlier this year would defund federal grant programs that were expected to pay for portions of the Gateway project, notably the $1.5 billion replacement of New Jersey's Portal Bridge.

Trump has instead floated the idea of a $1 trillion spending plan for infrastructure that would raise as much as 80% of its funds from public-private partnerships. Details of that plan are expected early next year. A key panel of business executives that was organized to help envision the funding vehicle disbanded in August after corporate leaders distanced themselves from the president following his comments on the violence in Charlottesville, Va.

Wylde remained optimistic, given the economic importance of building a new rail tunnel to Manhattan under the Hudson before the deteriorating existing one must be partially or completely closed for repairs. "The Partnership has been repeatedly assured by the White House and by the Department of Transportation that this is a national priority," she said. "I can't imagine they're not going to ensure that this gets done."