The Mile High City has joined a growing list of U.S. metros put on notice by the Trump administration: No more federal money for shelters that support migrants.
Denver leaders recently heard from the Federal Emergency Management Agency (FEMA) that the agency is rescinding $24 million in grants earmarked to support shelters and services for migrants arriving in the city.
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The abrupt termination of funding was revealed during a routine presentation to the City Council in April, disrupting the plans of city officials who were relying on these funds to offset the costs of an influx of migrants.
"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," Budget Director Justin Sykes told the council, according to ABC affiliate Denver 7.
Cities caught in between
Cities applied for FEMA grants for migrant support because they faced significant costs in providing emergency shelter, food, medical care and transportation to migrants released from federal short-term holding facilities.
The Shelter and Services Program (SSP), administered by FEMA, was created to help non-federal entities offset some of these emergency costs, especially as large numbers of migrants began arriving and many could not immediately support themselves. Without this federal reimbursement, cities would have to bear these expenses alone, straining local budgets and resources.
In Denver’s case, roughly $8 million of the $32 million promised had already been dispersed, according to Denver 7. It’s unclear whether FEMA will seek repayment of the initial grant.
According to The Denver Post, Sykes told council members that the upcoming 2026 city budget doesn’t account for federal grant money that has been canceled or may be canceled. But the city won’t feel the hit for a while, as it wasn’t expecting the federal reimbursement for several years, city spokesperson Jon Ewing told The Post.
In a letter to the city, FEMA administrator Cameron Hamilton said Denver’s program was at odds with Trump’s view that federal money shouldn’t support programs tied to encouraging or facilitating illegal immigration.
“Grant programs that support, or have the potential to support, illegal immigration through funding illegal activities or support for illegal aliens that is not consistent with DHS’s enforcement focus do not effectuate the agency’s current priorities,” the letter read.
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Trump’s crackdown on sanctuary cities
Denver is the latest city caught in the crossfire of Trump’s campaign against sanctuary cities that limit their cooperation with federal immigration enforcement. The administration has repeatedly threatened and, in several cases, already pulled significant funding from major cities across the country.
New York City recently faced a similar blow, losing $188 million previously allocated to its migrant support programs, according to CBS News. The administration’s stark message is clear: Cities that openly defy strict immigration policies should expect to hear from FEMA.
Earlier this year, President Trump signed sweeping executive orders aimed explicitly at clamping down on sanctuary policies.
These orders include financial penalties, aggressive enforcement of deportation protocols and substantial funding cuts for non-compliant cities. Trump’s strategy, critics say, puts city budgets nationwide in peril, risking vital public services that extend well beyond immigration support.
Federal courts have already blocked some attempts to withhold funds from 16 cities, including Minneapolis, Portland and San Francisco, citing constitutional limits on the executive branch’s authority to impose new grant conditions without congressional approval.
That means the actual impact on city budgets remains uncertain and will likely be determined through ongoing legal battles.
How Denver’s budget crunch could hit residents
Denver’s total budget for 2025 is about $4.4 billion, down 2.5% from the year prior. But since the city wasn’t expecting to receive the full federal allotment for several years anyway, FEMA’s move doesn’t exactly spell a budget crisis — yet.
However, if Denver pushes forward with its migrant support, the money will need to come from somewhere — so it’s conceivable other parts of the city budget could suffer.
The sudden funding withdrawal could become more than politics. As city officials consider whether to mitigate the loss of the FEMA money, residents may wonder how deep the hole is — and how much they may end up paying for a battle fought at the federal level.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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