Gov. Beshear: Kentucky Joins Lawsuit To Stop Trump Administration's Move To Freeze Federal Funding Tied to Unemployment

$3.6 million being withheld despite lawful appropriation by Congress

FRANKFORT, Ky. (Aug. 6, 2025) – Today, Gov. Andy Beshear announced Kentucky is joining 22 other states and the District of Columbia in challenging the Trump Administration over its unlawful decision to freeze $3.6 million in previously approved grants administered by the Kentucky Education and Labor Cabinet to support efforts tied to Unemployment Insurance (UI). The funds were appropriated by Congress, and the freeze violates federal statutory and regulatory requirements.

"This is not about party affiliation – these funds were appropriated by Congress to help Kentuckians get back on their feet after a job loss, and it's my job to make sure we get every penny," said Gov. Beshear. "In Kentucky, about $3.6 million in federal grants are being illegally withheld. We will always fight for hardworking Kentuckians and to ensure a bright future for all our families."

The termination of these grants will impact:

Funding to protect UI from fraud;
Efforts to modernize UI programs; and
Work to promote the equitable access to the Unemployment Compensation (UC) program.
The lawsuit also seeks to protect about $4.2 million in remaining at-risk funding that Kentucky was awarded, including federal money that supports disaster relief jobs and employment, as well as training services for those affected by severe flooding.

Gov. Beshear joined the lawsuit in his official capacity as Governor, along with Kansas Gov. Laura Kelly, Pennsylvania Gov. Josh Shapiro and Michigan Attorney General Dana Nessel. States involved in the suit include New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Wisconsin, as well as the District of Columbia.

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