The federal government just made it official: It won’t be paying $24 million the city of Denver had expected to get back.
The city spent the money in 2023 and 2024 to run emergency shelters for tens of thousands of immigrants who were arriving in the city. Under the Biden administration, the federal government promised to reimburse cities for that kind of spending.
Under President Donald Trump, that’s not happening. The Federal Emergency Management Agency told the city this month that it wouldn’t be paying about $24 million in reimbursements that the city was expecting.
“That's $24 million that the city worked to procure — for a crisis that it did not create — that it will not be getting,” said Jon Ewing, a spokesperson for Mayor Mike Johnston.
The loss of funds could foreshadow a longer federal campaign to cut funding for Denver and other cities that support immigrants. Separately, a new executive order issued by Trump Monday requires the federal government to compile a list of “sanctuary” jurisdictions and take action against them.
The $24 million in question was spent in large part to aid people who had turned themselves in to Border Patrol and then were paroled into the country with the CBP One app.
The letter from FEMA didn’t accuse the city of doing anything wrong. Instead, it said that the spending “is not consistent with (federal Department of Homeland Security’s) current priorities” because of its support for immigrants without legal status.
The letter stated that the grant program provided money for “shelter, food, transportation, acute medical care, and personal hygiene supplies for individuals released from [Department of Homeland Security] short-term holding facilities,” arguing that it provided “support for illegal aliens.”
The letter states the agency can terminate grants if they no longer align with its goals or priorities.
“It was a really onerous process to apply for that reimbursement. It took a really long period of time to file for that, but we did everything by the federal government standards so as to receive that money, and, you know, be made whole, or at least be partially compensated for this work,” Ewing said.
U.S. Rep. Diana DeGette, of Denver, said in an interview that the city and state would fight back.
“I have no doubt that Denver and Colorado will push back,” DeGette said, “because we can't be subservient to an authoritarian leader who just decrees that we have to do whatever he wants or he's not going to give us the money that we're legally entitled to.”
The city was awarded $32 million from the reimbursement program, and had already received $8 million, according to Ewing. City officials are hoping that the federal government is only blocking the payout of the remaining money, and not pursuing a clawback of the money it already granted.
FEMA has been aggressive in canceling these grants elsewhere. The agency pulled $80 million of funding from New York City’s bank accounts in February and was pursuing another $106 million as of April 1, Gothamist reported.
What does the loss of funds mean for Denver?
The city has already spent the money in question, dipping deep into its savings in 2024 to pay for its immigration response.
The good news, at least for the city’s budget, is that Denver officials hadn’t expected to be paid anytime soon, anyway.
“We don't incorporate those [reimbursements in] our budget, really, until they're in house, or until we have a really good assurance that we're going to receive them. So in this case, we weren't factoring those into the budget for this year or next year,” Ewing said.
Still, the loss of the money adds to the already significant pressure on the city’s budget. Denver ran a $108 million deficit last year, in part because of a surge of spending on immigration and homeless responses.
The city cut spending to bring the budget closer to balance in 2025. But it’s now facing another tough budget year for 2026, with slow revenue growth due to a shaky economy — one that Ewing blames on Trump’s trade war.
That $24 million would have come in handy, especially with the city’s depleted savings account.
It doesn’t seem Denver officials are holding out much hope of getting the money back. The city Department of Finance will go “back and forth” with the feds to try to get the grants paid, Ewing said. But at this point, he added, there’s no plan to go to court.
What’s next?
Ewing said he was unaware of any other specific threats to federal funding for Denver. But bigger changes could be coming.
On Tuesday, Trump issued an executive order that was described as “cracking down on sanctuary cities.” While it didn’t name Denver or other cities specifically, it ordered federal officials to publish a list of states and cities that “obstruct the enforcement of Federal immigration laws.”
Attorney General Pam Bondi and DHS Secretary Kristi Noem are to publish the list within a month. The federal government is then to identify federal funds to those “sanctuary” jurisdictions “for suspension or termination as appropriate.” Denver has received from about $100 million to nearly $220 million in federal grants in recent years.
“The city does not have the capacity if all of that federal funding were to go away to backfill it. And so that is another risk that we are carefully monitoring and very concerned about,” said Justin Sykes, the city’s budget director.
The latest Trump order also called for action to prevent federal benefits for undocumented immigrants and against policies “favoring aliens over any group of American citizens.” That includes offering in-state tuition to immigrants, as Colorado does.
Read: The Second Trump Administration and its impacts on Colorado
This fight has been happening since the first Trump term.
Trump issued similar “sanctuary” orders in January and at the beginning of his first term in 2017, with both facing legal challenges. The 2017 order was blocked that year by federal Judge William Orrick III, who issued a nationwide permanent injunction against it.
The earlier 2025 order was temporarily blocked by the same judge last week. With the most recent order, the Trump administration is trying again.
City leaders have generally denied that Denver is a “sanctuary” city, though the city of Denver and the state of Colorado have passed numerous laws that limit cooperation with law enforcement or provide benefits for undocumented immigrants. Those laws are the result of decades of advocacy.
Local officials have defended many of these policies as good for public safety, arguing it harms the wider community when immigrants are afraid to report crime because of the threat of deportation, or drive without insurance because they can’t get a driver’s license.
“We do not harbor anyone,” Johnston said last month after testifying in Washington. “We were providing services. I think there’s no federal law that makes it illegal to give someone food who is hungry, or put someone into an overnight shelter who is at risk of freezing. I think that’s just common decency and humanity."
CPR Washington correspondent Caitlyn Kim contributed to this article.
