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FEMA Grant Upheaval Leaves States Scrambling as Courts Halt and Restore Awards

Court fights over immigration-linked conditions have produced stop-start funding that emergency managers say jeopardizes staffing and projects.

Overview

  • FEMA froze a $320 million Emergency Management Performance Grant after ordering states to resubmit population counts that exclude people removed under immigration laws, leaving officials uncertain how to comply during the federal shutdown.
  • A Rhode Island judge’s Sept. 30 temporary restraining order forced FEMA to rescind Homeland Security Grant Program award notices, and Senior District Judge William E. Smith later rebuked newly imposed “unlawful” conditions.
  • Reworked Homeland Security grant allocations slashed New York’s expected funding by about $100 million (79%) and cut Illinois by 69% while some territories, including the U.S. Virgin Islands, received unexpected increases.
  • DHS says the changes reflect recent population shifts and evolving threats as FEMA also cut the spending window from three years to one and the administration suspended a $3.6 billion resilience program.
  • State and local agencies report hiring pauses, delayed purchases and risks to contractor payments, even as a Manhattan judge ordered DHS and FEMA to restore $34 million in New York City transit security grants.