Trump Administration Threatens Federal Funding Cuts to Sanctuary Cities Amid Legal Battles
January 14, 2026
Minnesota has already faced proposed withholdings tied to immigration enforcement, including a plan to freeze $515 million every three months from 14 Medicaid programs deemed high risk, a move currently challenged in court.
These actions form part of a broader wave of funding pressures and lawsuits over sanctuary policies, with Minnesota cited as a focal point where federal funding could be frozen amid fraud and enforcement concerns.
Specific actions include potential withholdings affecting Minnesota and the Medicaid freeze plan, subject to appeals and legal scrutiny.
The Justice Department has filed lawsuits against multiple cities and states over sanctuary policies, highlighting ongoing legal battles surrounding funding and enforcement.
There remains no precise legal definition of sanctuary policies, a gap that complicates enforcement and eligibility for funding and has led to repeated court challenges.
New York officials pledged cooperation with federal authorities against dangerous criminals while vowing to resist aggressive funding cuts and prepare for court battles if funding is targeted.
Chicago leaders condemned the funding cuts as unconstitutional and immoral, threatening legal action to regain any withheld money.
The dispute is framed as a clash between federal funding policies and local commitments to immigrant communities and law enforcement, with potential nationwide implications.
Overall, the administration has used or threatened funding cuts across multiple programs to pressure sanctuary policy compliance, though many efforts face legal challenges and court scrutiny.
Starting February, the administration threatens to withhold federal funding from sanctuary jurisdictions, claiming their policies protect criminals and fuel fraud and crime, a move tied to broader immigration enforcement.
The threat was articulated at a Detroit Economic Club speech, where officials offered no detailed criteria or mechanisms for how funding would be cut.
Trump said the withholding would be substantial, stressing that sanctuary governments do everything possible to protect criminals at the expense of American citizens, while avoiding specific funding figures.
Summary based on 12 sources
Get a daily email with more World News stories
Sources

ABC7 New York • Jan 13, 2026
Trump says federal government will no longer fund sanctuary cities; Mamdani vows to defend New York
Chicago Sun-Times • Jan 14, 2026
Mayor Johnson pushes back on Trump threat to halt U.S. funding for Chicago, other sanctuary cities - Chicago Sun-Times
ABC7 Los Angeles • Jan 14, 2026
Trump threatens to halt federal money next month not only to sanctuary cities but also their states