On June 24, 2025, New Jersey Attorney General Matt Platkin filed suit with 20 other state attorneys general and the governor of Pennsylvania to stop the Trump administration from unlawfully terminating billions of dollars of federal grant funding to states. Since the beginning of the administration, multiple federal agencies have exploited a single Office of Management and Budget (OMB) regulatory clause by purporting that the phrase “no longer effectuates … agency priorities” provides federal agencies the authority to withhold federal funds that Congress appropriated and the agency had already granted to states.

By means of this single phrase, Trump has terminated billions of dollars in state grants that combat violent crime and protect public safety, equip law enforcement, educate students, safeguard public health, protect clean drinking water, conduct medical research, address food insecurity, and provide unemployment benefits to workers, among many other funding goals. Cutting off funding makes states less safe and directly harms state residents. The harm continues, as new termination notices are issued to states every week.

Use of the “agency priorities” provision to terminate federal grants violates numerous laws. The OMB’s own interpretation of the clause does not allow agencies to terminate grants using a post-hoc change in priorities. In addition, the arbitrary and capricious manner in which the government has cut off funding is a violation of the Administrative Procedure Act. Agencies lack the power to cut off Congressionally appropriated funds arbitrarily and without notice, as a constitutional matter.

The plaintiff states are seeking a declaratory judgment that the “agency priorities” phrase cannot be used to terminate grants based on priorities identified after the grants were issued or a permanent injunction prohibiting the administration from terminating awards on the same basis.

On July 17, 2026, the court declared that the Trump administration illegally misused its authority to unlawfully pull billions of federal funding that Congress had set aside for crucial state programs and services. The court ruled that the Trump administration cannot cancel grants based on new rules or goals established after the fact.  

Instead of working with us to keep the public safe and lower costs for hardworking New Jerseyans, the Trump Administration has recklessly and illegally gutted federal funding for public safety, disaster preparedness, scientific research, clean water, and more. Today’s decision is an important win for all New Jerseyans and confirms that the Trump Administration defied the law when it embarked on its campaign to gut critical federal funding to the states. The President and his allies cannot hold critical programs hostage to their personal whims and political ideologies, destabilizing the country by yanking essential federal funding that was already awarded to the states.Attorney General Jennifer Davenport