Wisconsin agencies sue federal government over unpaid unemployment system grants
The coalition says the cancellations breached grant terms and stalled system upgrades meant to cut fraud and improve access, including $29 million for Wisconsin.
- On Thursday, Wisconsin and 13 other states filed a lawsuit against the Trump Administration challenging the termination of more than $45 million in federal grants intended to modernize unemployment insurance systems.
- In May 2025, the U.S. Department of Labor terminated the funding, stating the program "does not effectuate agency priorities." The grants were originally allocated under the American Rescue Plan Act.
- Filed in the U.S. Court of Federal Claims, the lawsuit argues the terminations violated the "express terms" of grant agreements, which allowed termination only in narrow circumstances. Wisconsin Attorney General Josh Kaul leads the legal challenge.
- Governor Tony Evers said the funding loss "pulled the rug out from us," halting years of modernization work. Wisconsin's $29 million share was meant for fraud detection and system upgrades.
- Despite multiple letters from Governor Evers to President Donald Trump urging funding restoration, the requests have "largely gone unanswered." The coalition now seeks legal recourse to enforce the original grant terms.
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Wisconsin agencies sue federal government over unpaid unemployment system grants
(The Center Square) – Several Wisconsin departments are suing the U.S. Department of Labor claiming it owes the state $10 million in terminated grants related to a system upgrade of the state’s unemployment insurance program.
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