Trump Administration Moves to Withhold Funding from Local Governments Under Judicial Preliminary Injunction

A federal judge in Washington state issued a preliminary injunction on Tuesday, effectively blocking the Trump administration from moving forward with threats to withhold billions of dollars in federal transportation funding from Denver and several other local governments across the country. The ruling marks a significant setback for the administration, which had tied access to critical infrastructure grants to compliance with its policies on diversity programs and immigration enforcement.

Denver and dozens of municipalities had filed suit in May, arguing that threatening to cut off up to $4 billion in federal grants over policy disagreements exceeded the Executive Branch’s authority. In the injunction order, the judge found that such actions were "unlawful and politically motivated funding conditions," raising concerns about the separation of powers between the branches of government.

The court’s decision underscored the severity of the administration’s tactics, noting that even the risk of a potential loss of funding caused real and immediate harm. “It is this looming risk itself that is the injury, and one that Plaintiffs are already suffering,” the order stated. The judge further explained that the uncertainty brought by these threats creates an irreparable injury, as local governments rely heavily on predictable funding streams for essential services and infrastructure planning.

The controversy began after U.S. Transportation Secretary Sean Duffy circulated a memo in April, warning grant applicants that failure to comply with new White House positions—particularly regarding diversity, equity, and inclusion initiatives—could result in the loss of crucial federal support. The memo also stated that cities refusing to help enforce federal immigration policy might be penalized by grant withdrawals, sparking widespread concern among local governments nationwide.

The legal rebuke comes amid a broader pattern of federal courts challenging executive actions aimed at leveraging federal funds to advance policy preferences. Recent court interventions have already blocked key Trump administration orders on education and prison healthcare reforms, signaling increasing judicial scrutiny of federal conditional funding.

Reacting to the ruling, Denver Mayor Mike Johnston welcomed the court’s intervention. “Denver follows all laws—federal, state, and local—and it should not be so much to ask the White House to do the same,” Johnston said in a statement on Wednesday. He expressed gratitude for what he described as the court’s “swift and precise ruling” that protects federal funding for Denverites and provides stability for the city’s budget and public services.

The preliminary injunction will remain in place as the case moves through the courts, preserving transportation funding for Denver and dozens of other municipalities while the underlying legal questions are further litigated.