For Immediate Release:
August 1, 2025
Contact:
Grace Hoge
[email protected]
Governor Kelly Joins Multistate Lawsuit Challenging Trump Administration’s
Illegal Attempts to Terminate
Critical Federal Funding to States
~~Kansas Joins Coalition in Suing Federal Agencies Over Illegal Use of
a Single Clause in Federal Regulations to Terminate Billions of Dollars
in Federal Funding~~
TOPEKA — Governor Laura Kelly today announced that Kansas joined a coalition of 23 attorneys general and governors for the commonwealths of Pennsylvania and Kentucky in suing the Trump Administration over its unprecedented and unlawful attempts to invoke a single provision buried in the federal regulations to strip away billions of dollars in critical federal funding for states and other grantees. The lawsuit seeks to limit the Trump Administration’s use of this regulation to indiscriminately and illegally terminate critical funding for combating violent crime, educating our students, protecting clean drinking water, conducting lifesaving medical and scientific research, safeguarding public health, addressing food insecurity, and much more.
“It makes no sense to claim that protecting Kansans from natural disasters or supporting Kansas farm products no longer supports the priorities of FEMA or the USDA,” Governor Laura Kelly said. “I joined this lawsuit on behalf of Kansas to ensure funds going towards critical programs our state depends on are not ripped away by the Trump Administration—or any presidential administration—on a whim.”
Since January 20, at the direction of President Trump and the Department of Government Efficiency (DOGE), federal agencies have stripped away thousands of grants they had previously awarded to states and grantees. The Trump Administration has slashed this critical federal funding by invoking a single clause in the federal regulations of the Office of Management and Budget (OMB), which provides that agencies may terminate an award of federal funding if it “no longer effectuates … agency priorities.” Those five words have formed the basis for much of the Trump Administration’s indiscriminate campaign to unlawfully terminate critical funding expressly authorized by Congress and awarded to states.
In Kansas, since January 20, the Trump Administration has terminated millions of dollars of federal funding for a wide variety of critical programs.
Among other things, the Trump Administration has invoked the five words in this regulation to terminate millions of dollars used to purchase goods from Kansas farmers, to mitigate natural disasters, and to enhance childhood education.
It has cut $2 million to a Kansas Department of Agriculture (KDA) program that strengthened our food supply chain by purchasing local Kansas grown food and goods for distribution across the state. It has cut Kansas Department of Health and Environment (KDHE) programs in Southeast Kansas that enhanced K-12 science education and access to healthy food.
As this lawsuit explains, the Trump Administration’s decision to invoke this regulation as its basis for slashing billions of dollars of critical funding to states is a dramatic departure from past practice. Before the Trump Administration, federal agencies had not terminated grants merely because the agency’s priorities shifted midway during the use of the grant without any advance notice. That was not how they applied the regulation, either.
However, since President Trump took office, federal agencies have shifted course and claimed unfettered authority to terminate grants on a whim and with no advance notice. In February, President Trump issued an executive order formally directing agencies—and the DOGE employees assigned to these agencies—to terminate grants en masse. And federal agencies have carried out that directive by invoking the regulation as grounds for terminating entire programs based on a purported shift in agency priorities, without any notice to the states and in conflict with the federal statutes appropriating funding for these programs.
The lawsuit argues that the Trump Administration’s decision to invoke the regulation to terminate grants based on their changed agency priorities is unlawful. The lawsuit explains that the regulation does not authorize federal agencies to terminate grants based on changes in agency preferences that occur after a grant is awarded. The lawsuit also notes the importance of obtaining clarity regarding the scope of this regulation, as states collectively accept hundreds of billions of dollars a year that are at risk of termination pursuant to this regulation.
The coalition’s lawsuit is against OMB and a number of federal agencies that have unlawfully relied on this regulation to collectively slash billions of dollars in federal funding to states: the Departments of Agriculture, Commerce, Defense, Homeland Security, Interior, Justice, Labor, and State, as well as the Environmental Protection Agency, Federal Emergency Management Agency, National Endowment for the Humanities, and National Science Foundation.
The coalition filed suit in the District of Massachusetts and seeks a declaratory judgment that the OMB regulation and Defendants’ regulations do not independently authorize the Trump Administration to terminate funding based on agency priorities that were identified after the grant was awarded. In the alternative, the coalition seeks to vacate the Trump Administration’s decision—reflected in its uniform practice across all of the Defendant agencies—to invoke the regulation as grounds for terminating billions of dollars of federal funding based on purported changes in agency priorities.
Joining the amended filing alongside Governor Kelly is Governor Andy Beshear for the Commonwealth of Kentucky. Others participating in the suit include: the Attorneys General of New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Wisconsin, and Governor Josh Shapiro for the Commonwealth of Pennsylvania.
A copy of the filing is available here.
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