Federal Actions Impacting Cities

The basis of the legislation includes:

• Full funding for the remainder of the federal fiscal year for the Department of Agriculture, Food and Drug Administration, and Department of Veterans Affairs, as well as military construction projects.
• Funding for all other federal agencies through Jan. 30, 2026.
• Rehiring of federal employees laid off during the shutdown, along with back pay for all federal employees.
• An agreement from Senate leadership to hold a vote in December to extend the Affordable Care Act subsidies that would otherwise expire at the end of the year.
• A prohibition on additional reductions in force by government departments and federal agencies through the end of January 2026.
• A ban on hemp products containing more than 0.4 milligrams of THC, effective one year after enactment. 

It is unclear if a longer-term deal will be made to continue full operations of the federal government after Jan. 30, 2026. 

LMC continues to determine the long-term effects of the new spending bill but programs administered by the Department of Agriculture, Food and Drug Administration, and the Department of Veterans Affairs should continue, at least, through the end of the fiscal year. Most notably, the federal Supplemental Nutrition Assistance Program (SNAP) should continue as it is administered by the Department of Agriculture.  

In an article from the National League of Cities, it is recommended that city leaders begin by asking three critical questions: 

1. How much federal funding supports your programs and projects, both directly and indirectly through the state? 
2. How many federal employees, including military personnel, live in your community, and could face paycheck disruptions?  
3. How many of your residents receive federal support for nutrition, housing, heating, or other essential services that will be impacted by the lack of federal funding? Can your city and community partners support those residents? 

By working to answer these questions, city leaders can identify priority budget areas, anticipate potential service gaps, and make informed operational decisions to support their residents. 

While it is difficult to determine how many federal employees live and work within a given city, Congressional Research Service has issued a report Current Federal Civilian Employment by State and Congressional District (pdf), which gives a rough idea of the number of federal employees in the state. The report does not include figures for uniformed military personnel or federal contractors. 

City officials are urged to contact their federal representatives and ask them to end the shutdown. The National League of Cities (NLC) has created a tool that allows city officials to easily contact their federal representatives with a template letter. 

HSTFs are to be established by the U.S. Attorney General and Secretary of Homeland Security and include representation from other federal agencies with law enforcement officers, or agencies with the ability to provide logistics, intelligence, and operational support. In addition, HSTFs are to include representation from relevant state and local law enforcement agencies.

As stated in President Trump’s order (Protecting the American People Against Invasion), the objective of each HSTF is to “end the presence of criminal cartels, foreign gangs, and transnational criminal organizations throughout the United States, dismantle cross-border human smuggling and trafficking networks, end the scourge of human smuggling and trafficking, with a particular focus on such offenses involving children, and ensure the use of all available law enforcement tools to faithfully execute the immigration laws of the United States.”

Yes, law enforcement members of LMCIT’s PATROL — Peace officer Accredited TRaining OnLine program, can learn about immigration law and their responsibilities as an officer. This course was updated in April 2025. Read more about the PATROL program.

While there is no statutory definition of a sanctuary city, the U.S. Department of Justice (DOJ) maintains a list of sanctuary jurisdictions throughout the country. In determining a sanctuary jurisdiction, the DOJ looks at the following characteristics.

• Public declarations
• Laws, ordinances, executive directives
• Restrictions on information sharing
• Funding restrictions
• Non-cooperation with federal immigration enforcement
• Limits on ICE detainers
• Jail access restrictions
• Immigrant community affairs offices
• Federal benefit programs

No Minnesota cities were named in the DOJ list of sanctuary jurisdictions. However, the state of Minnesota was named as a sanctuary jurisdiction.

The DOJ’s list of sanctuary jurisdictions will be reviewed regularly to include additional jurisdictions and remove jurisdictions if necessary.

On Sept 29, 2025, the Department of Justice filed a lawsuit (pdf) against the State of Minnesota, the City of Minneapolis, the City of St. Paul, and Hennepin County over their sanctuary city policies.

The U.S. Department of Justice has not identified any Minnesota cities as sanctuary jurisdictions. However, the DOJ has filed a lawsuit (pdf) against the State of Minnesota, the City of St. Paul, the City of Minneapolis, and Hennepin County challenging what it claims are sanctuary policies.    

The Minnesota Attorney General has issued an opinion determining that Minnesota Statutes, section 629.30 and Minnesota Statutes, section 629.34 prohibit state and local law enforcement agencies from holding someone based on an immigration detainer if the person would otherwise be released from custody.

The U.S. Department of Justice has filed a lawsuit challenging the opinion of the Minnesota Attorney General.

Cities are encouraged to work with their city attorneys to understand the nature of immigration detainers and what rights those orders grant federal officials.

City leadership, in consultation with the city attorney, should provide guidance to city staff on how to respond to such requests.

In April 2025, a judge in Wisconsin was arrested and charged in federal court for allegedly helping an undocumented immigrant avoid arrest in the Milwaukee County Courthouse. City leaders, in consultation with your city attorney, should provide guidance to city staff on how to respond to requests from immigration officials in a manner that protects the rights of all parties.

Congressional Research Service has published a Legal Sidebar “Sanctuary” Jurisdictions: Legal Overview, giving a more in depth analysis of the issue. 

The executive order does not require cities to discontinue current DEI programs. However, on July 30, 2025, the U.S. Department of Justice (DOJ) released Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination. The guidance outlines areas of DEI programs the DOJ considers unlawful discrimination. Cities should review this new guidance with their city attorney to determine whether changes to DEI programs should be made. 

In addition, the DOJ has opened an investigation to determine whether the State of Minnesota, including the Minnesota Department of Human Services has engaged in discrimination through its DEI policies. It is not yet known whether this investigation will affect cities.

The League does not track this data.

The U.S. Equal Employment Opportunity Commission (EEOC) has provided guidance entitled What You Should Know About DEI-Related Discrimination at Work. City staff, in consultation with the city attorney, should review this guidance and determine if changes need to be made to any DEI policies or programs.

There is no prohibition on mandatory DEI training. However, the U.S. Equal Employment Opportunity Commission’s (EEOC) guidance, What You Should Know About DEI-Related Discrimination at Work, states that DEI training might create a hostile work environment. Whether a particular training is deemed a violation of Title VII will depend on the content of the training.

The U.S. Equal Employment Opportunity Commission (EEOC) sent letters to several law firms asking for information on such employee groups such as “Asian Pacific Islander Resource Group” and “Black Business Professionals Affinity Group.” If a city sponsors or facilitates these types of groups, it is advisable to ensure that participation is optional and open to others regardless of protected characteristics. Read more about the letters the EEOC sent to the law firms.

On March 1, 2025, President Trump issued Executive Order 14224 Designating English as the Official Language of the United States. On July 14, 2025, the Attorney General issued a memorandum for all federal agencies with guidance on implementing Executive Order 14224. The guidance only applies to federal agencies and does not affect city services.

Generally, the executive orders do not apply to local policies. However, cities should review any federal grants and assistance they receive to determine if local policies and procedures will jeopardize those funds. It is always important to work with your city attorney if review or revision to an individual city’s policies or procedures is being contemplated.

In addition, in the Executive Order, Strengthening and Unleashing America’s Law Enforcement to Pursue Criminals and Protect Innocent Citizens, President Trump directs the Attorney General to prioritize prosecution of local officials who:

• Direct the obstruction of criminal law, including “prohibiting law enforcement officers from carrying out duties necessary for public safety,” and
• Engage in discrimination or civil-rights violations “under the guise of ‘diversity, equity, and inclusion’ initiatives that restrict law enforcement activity ….”

It is unclear what types of programs or policies the administration will be reviewing pursuant to this order.

The Federal Student Aid Office is reviewing the recent executive orders regarding the PSLF. Currently, there are no changes to PSLF.

There is no definitive list of grants or programs that have been eliminated due to executive orders. However, several lawsuits have been filed challenging specific programs including:

• Department of Health and Human Services eliminating more than $11 billion to local governments (pdf) to address the effects of the pandemic as well as COVID-related grant programs. Harris County et al v. Kennedy Jr. et al.
• AmeriCorp grants. San Franscisco Unified School District v. AmeriCorps.
• Inflation Reduction Act and Infrastructure Investment and Jobs Act. The Sustainability Institute v. Trump.

The funding pause may cause delays or cancellations of projects and may result in economic uncertainty, and impact both future and local projects already underway. Cities should carefully review their grant agreements for payment obligations. Cities that havenʼt signed grant agreements should reach out to the relevant agencies and expect that responses will vary by program. For new contracts that are contingent upon the cityʼs receipt of anticipated federal funding, cities should consider including a provision that if such funding is not received, is reduced, or is otherwise unavailable because of any action or decision made by an agency providing funding the city may, upon written notice to the other party, suspend performance of or terminate the contract, in whole or in part, without liability or penalty.

Legal challenges both for project delays and the broader constitutional implications should be expected. And finally, cities should inform their agency contacts about any disruptions, and document the related costs or losses (and share this with LMC and your members of Congress).

Through a memo released by the Secretary of the U.S. Department of Transportation (DOT), DOT staff is directed to identify and eliminate all orders, directives, rules, regulations, notices, guidance documents, funding agreements, programs and policy statements, or portion thereof, adopted during President Biden’s term which reference or relate in any way to climate change, “greenhouse gas” emissions, racial equity, gender identity, “diversity, equity, and inclusion” goals, environmental justice, or the Justice 40 Initiative. It is unclear what, if any, affect this memo will have on ongoing funding agreements with DOT. 

In addition, the DOT Secretary issued an order to ensure that all DOT grants, loans, contracts and DOT-supported or assisted state contracts meet specific requirements.  Among other requirements, the DOT Secretary’s order provides that DOT programs, including grants, loan and contracts, shall not be used to “further local political objectives or for projects and goals that are purely local in nature and unrelated to a proper Federal interest.”

The order provides that DOT programs, including loans, grants, and contracts shall prioritize projects and goals that:

• Utilize user-pay models.
• Direct funding to local opportunity zones.
• To the extent practicable, mitigate the unique impacts of DOT activities on families and family-specific difficulties, such as the accessibility of transportation to families with young children and give preference to communities with marriage and birth rates higher than the national average.
• Prohibit recipients of DOT funds from imposing vaccine and mask mandates.
• Require local compliance or cooperation with federal immigration enforcement and with other presidential goals.

Until further guidance is given by DOT, it remains unclear how these changes will affect existing city projects. 

It is common for cities to receive funds from state programs which are funded by the federal government. Cities should check with the state to determine if any of these programs are affected.

The executive order, Council to Assess the Federal Emergency Management Agency, does not require any immediate changes to FEMA responses. The order creates a “FEMA Review Council” charged with assessing and enhancing FEMA’s effectiveness. The review council is to provide an assessment of the adequacy of FEMA’s response to disasters during the previous four years, and compare FEMA’s responses with other state, local, and private sector responses. It is not yet known if any of the council’s recommendations will affect cities. However, the State of New York has filed a lawsuit challenging the federal government’s actions freezing certain FEMA funds.

A recent memo issued by FEMA recommends restricting FEMA funds to sanctuary cities (pdf). However, the limits are not to apply to disaster grants.

Cities should carefully review any grant conditions from the federal government to ensure they are able to meet them. Federal agencies have recently modified their grant conditions to include new terms. 

For example, the Department of Homeland Security’s Standard Terms and Conditions for financial assistance now include requirements that recipients must assist immigration officials and refrain from operating any programs that advance or promote DEI. Similar requirements have been found in grants from the Federal Aviation Administration, Housing and Urban Development, and Department of Transportation.

Yes. Online portals for reimbursement of existing federal grant awards have sometimes been unavailable when users attempt to access them. There is generally no warning of this unavailability or notice when the portal will reopen. Minnesota Management and Budget (MMB) suggests that cities regularly check the portals and submit reimbursement requests as soon as eligible.

Yes, Minnesota Management and Budget (MMB) is tracking when the state receives notification that there is a temporary disruption or a permanent cancellation of funds the state was expecting. MMB updates this resource weekdays around 4 p.m. View the MMB federal funding disruptions tracker. 

On Oct. 3, 2025, a USDOT interim final rule took affect removing the use of race- and sex-based presumption of social and economic disadvantage for establishing DBE eligibility.  MnDOT is working on guidance to address the change. Until more guidance is available, State Aid is recommending that bid dates for Federal Aid Projects with a DBE goal of greater than 0% be delayed until Oct. 20, 2025, or later. Cities should work with their city attorney for current projects receiving funding based on DBE programs.  

It is possible that suppliers will attempt to raise prices of goods due to tariffs issued by the Trump Administration. Whether these costs can be passed through to a city will depend on the terms of the existing contract. Cities should review current contracts to determine if suppliers are allowed to charge a city more for goods affected by the tariffs.

View the White House webpage for more information about the executive actions.

This is a complex and rapidly evolving situation. There are still many uncertainties, and we are working diligently to gather more information. While we are striving to stay nimble and responsive to your needs, we want to ensure that neither we nor you take premature actions before having the clarity and context required to make informed decisions. We also encourage you to work closely with your city attorney as your city develops plans related to executive orders and other federal actions.

In addition to funding limitations, the USDOJ announced the creation of the Enforcement and Affirmative Litigation Branch. The Affirmative Litigation Section will represent the United States by filing lawsuits against states, municipalities, and private entities that interfere with or obstruct federal policies. 

If you have questions related to these FAQs or the federal executive orders in general, contact the League’s Research Department at [email protected].