Wisconsin is joining 13 other states in suing the Trump administration over the termination of more than 45 million dollars in federal funding for unemployment insurance system improvements.
Wisconsin Attorney General Josh Kaul and the state Department of Workforce Development say the U.S. Department of Labor improperly canceled the grants in May 2025, cutting off approximately 10 million dollars in remaining funding for Wisconsin.
The federal grants were intended to modernize unemployment systems, strengthen fraud prevention, improve identity verification and help workers receive benefits more efficiently.
Wisconsin officials say the funding cuts halted projects, including an upgrade to the state’s unemployment insurance system, after 8.2 million dollars had already been spent on the project. Other fraud prevention work was also canceled.
The lawsuit, filed in the U.S. Court of Federal Claims, argues the federal government violated grant agreements by ending the funding before the projects were completed. The states are seeking monetary damages.
The case is co-led by Wisconsin Attorney General Josh Kaul and Maryland Attorney General Anthony Brown, with 13 other states joining the lawsuit.
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