Twenty-six states filed a lawsuit on Thursday accusing the Trump administration of illegally threatening to withhold billions of dollars in counterterrorism and emergency preparedness funds unless states adopt sweeping election changes and cooperate with federal immigration enforcement.

The dispute centers on policy changes that the Federal Emergency Management Agency and the U.S. Department of Homeland Security adopted in June, which condition public safety aid on states' compliance with President Donald Trump's political priorities. The lawsuit, filed in federal district court in Rhode Island, names FEMA, its administrator Robert J. Fenton, and Homeland Security Secretary Markwayne Mullin as defendants.

Rhode Island Attorney General Peter Neronha, one of four attorneys general co-leading the case, said the administration has tried this strategy twice before — and federal judges blocked it both times as unconstitutional.

"We refer to this case, colloquially, as 'FEMA 3.0,' and it's because it's the third case that we have had to file in the federal district court here in Rhode Island to force the federal government to return to this state and to our fellow states monies for emergency preparedness," Neronha said.

In the prior two cases last year, states secured permanent injunctions barring the federal government from tying essential public safety grants to unrelated policy priorities. One judge characterized the administration's conduct as "economic dragooning."

Neronha's co-leads on the lawsuit are Jen Davenport of New Jersey, Rob Bonta of California, and Kwame Raoul of Illinois.

What the June policy changes require

Under the new FEMA and DHS framework, FEMA can terminate grants for any reason. The policy also empowers the Department of Homeland Security to withhold 20% of a state's counterterrorism funding if it does not enact the election changes Trump wants.

Those election changes include three specific requirements: transitioning to paper-ballot systems, manually auditing 5% of voting systems, and using the department's "Systemic Alien Verification for Entitlements" (SAVE) system to verify the citizenship of poll workers and registered voters.

Critics say the SAVE system can wrongly flag citizens as non-citizens. They also argue the mandated changes are costly and unnecessary.

Who is affected

The contested funding pays first responders, protects schools and houses of worship, and strengthens cybersecurity, among other functions. According to the lawsuit, $55 million in annual federal aid to New Jersey alone is under threat. Davenport said the timing is especially dangerous, with war in the Middle East magnifying security threats.

"This federal funding is not just numbers on a spreadsheet; it is the shield that keeps New Jerseyans and all Americans safe from disaster," Davenport said. "FEMA always supported all states, until President Trump started trying again and again — and now again — to use Homeland Security and disaster-prevention funding as a political weapon to force states to comply with his unrelated political priorities."

Raoul argued that neither the president nor federal agencies hold the power to unilaterally freeze or cancel funding appropriated by Congress, and that the president cannot change the election process.

"Congress holds the power of the purse, and state legislatures set state election laws," he said. "No amount of bullying from the president will change these facts. Yet President Trump refuses to accept the reality of our democracy and instead insists on wasting state and federal resources when he frequently, consistently, and willfully violates the law and our Constitution."

Bonta noted that the affected funding helps Americans prepare for and recover from wildfires, earthquakes, floods, terrorist threats, and other emergencies.

"Trump is attempting to use this funding as leverage to force states to adopt his preferred political agenda. That is unlawful. It's unconstitutional. And today, we're asking the court to stop it," Bonta said. "Public safety should never become a bargaining chip. Emergency preparedness funding should be based on public need, not political agendas."

FEMA responds

In an unattributed statement from its communications team, FEMA said the new requirements will preserve election integrity and dismissed the litigation as "partisan pushback from New Jersey, California, Illinois, and Rhode Island" and "nothing new."

"We fully expected these left-wing politicians to oppose common-sense measures designed to protect election security and safeguard the integrity of American democracy," the agency said. "Election security is national security, and protecting our critical infrastructure remains a top priority for the Trump Administration. Concerns over voting processes, data security, and registration practices have made it clear that action is required."

The full plaintiff coalition

Beyond the four co-leading states, the lawsuit includes Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, Washington, and Wisconsin.

The case now moves to the federal district court in Rhode Island, where judges have twice before permanently enjoined similar funding conditions. The official complaint and FEMA's key-changes document for fiscal year 2026 remain the primary references for the exact grant terms now in dispute.