States Sue Over Conditions on Federal Disaster Funds
More than 24 states sued the Trump administration on July 23, challenging a Department of Homeland Security policy that would withhold 20% of certain Federal Emergency Management Agency grant awards unless states meet election and immigration-related conditions.
The states argue that DHS exceeded its authority by tying disaster-preparedness funding to changes in election administration and cooperation on immigration matters. The lawsuit places federal control over emergency-preparedness grants at the center of a broader dispute over the conditions agencies may attach to money distributed to state governments.
The states said they were allocated more than $740 million in fiscal-year 2026 funding covered by the dispute. They estimated that at least $148 million could be withheld under the policy’s 20% condition. The figures are plaintiffs’ estimates, and the precise grant programs and state-by-state amounts may vary.
What DHS announced
DHS announced the policy on July 10, 2026. Under the announcement, states would have 20% of certain FEMA grant awards withheld unless they satisfied specified requirements.
The election-related conditions cited in the lawsuit include using equipment that accepts hand-marked paper ballots rather than systems that rely on bar codes or QR codes. The states also cited requirements involving manual audits and reconciliation of voter lists.
Citizenship verification was another condition identified by the states. They also said the policy tied some of the funding to cooperation on immigration-related matters.
The grants are administered through DHS and FEMA and are intended for state emergency-preparedness activities. The dispute concerns certain grant awards, not every FEMA grant.
The states’ legal challenge
Rhode Island, California, Illinois and New Jersey are among the states involved in the lawsuit. More than two dozen state governments joined the challenge.
In their filing, the states argued that Congress authorized the funds for emergency planning and response, not to compel state governments to adopt federal election policies or satisfy immigration-related requirements. Their position is that DHS went beyond the authority granted to it when it linked the money to those conditions.
The lawsuit therefore contests both the financial consequence and the federal government’s use of the grant program. A state that does not meet the listed requirements would face a proposed reduction in a portion of an award, rather than an automatic permanent loss of all FEMA funding.
The $740 million figure represents the states’ description of fiscal-year 2026 allocations covered by the challenge. Applying the disputed 20% rate produces at least $148 million in potential withholding, according to the states’ account. That calculation does not establish that the money has already been cut.
Why the case matters
The dispute could determine whether the federal government may attach election and immigration conditions to state emergency-preparedness grants. That question could affect how DHS and FEMA administer similar funds to states across the country.
If the states prevail, the federal government could face limits on using these grants to require election-administration changes or immigration cooperation. If the policy survives, states receiving the affected grants could have to meet the listed conditions to avoid the 20% withholding.
The case remained unresolved as of Aug. 10, 2026. No final ruling on the states’ legal challenge had been issued by that date, so the disputed conditions had not been conclusively upheld or rejected.
Sources
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