Pennsylvania Gov. Shapiro sues Trump administration, citing frozen IRA funding

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Pennsylvania Gov. Shapiro sues Trump administration, citing frozen IRA funding

Federal agencies are unlawfully restricting Pennsylvania agencies from accessing funding for programs like Solar For All and greenhouse gas emissions mitigation, said state Gov. Josh Shapiro, D, in a lawsuit filed Thursday. “Since around January 27, 2025, federal agencies have restricted Pennsylvania agencies’ ability to access funding for grant programs that, in total, obligated over $3.1 […]

“Since around January 27, 2025, federal agencies have restricted Pennsylvania agencies’ ability to access funding for grant programs that, in total, obligated over $3.1 billion to Pennsylvania for fiscal years 2022 to 2026,” the lawsuit says.

This funding includes $156 million for the Inflation Reduction Act’s Solar for All program, which the lawsuit cites as an example of a grant award where the state has already executed an agreement for a subaward. The state has “an agreement is in place with the Philadelphia Green Capital Corporation to subaward about $70 million,” according to the suit.

“Many of these grant programs have deadlines by which Commonwealth agencies must use their grant award,” the lawsuit says. “Nevertheless, federal agencies are now unilaterally and arbitrarily suspending or restricting Commonwealth agencies’ access to the congressionally appropriated grant funds that have been committed to them.”

President Donald Trump’s first-day executive order Unleashing American Energy directed that “all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 or the Infrastructure Investment and Jobs Act,” but the plaintiffs argue that a unilateral suspension of state funds already appropriated and obligated by Congress violates the U.S. Constitution.

The suit was filed in the U.S. District Court for the Eastern District of Pennsylvania. Shapiro, the Pennsylvania Department of Environmental Protection, or DEP, the Pennsylvania Department of Conservation and Natural Resources, the Pennsylvania Department of Transportation, and the Pennsylvania Department of Community and Economic Development are named as plaintiffs.

Shapiro is the first governor to initiate a lawsuit against the Trump administration over the funding freeze, but Kentucky Gov. Andy Beshear, D, on Thursday joined a suit filed by attorneys general representing 22 states.

The defendants named are the U.S. Department of the Interior, the U.S. Environmental Protection Agency, the U.S. Department of Energy, the U.S. Department of Transportation, and the Office of Management and Budget, as well as the head of each department or agency.

Despite “two temporary restraining orders requiring federal agencies to restore access to suspended funds,” the plaintiffs are not able to access the funding appropriated to these programs, the lawsuit asserts.

The lawsuit also claims that federal agencies have threatened to not reimburse Pennsylvania agencies if the federal agency doesn’t support the activities of subrecipients who received grants allocated by the IRA and the Infrastructure Investment and Jobs Act.

“The Commonwealth thus either violates its obligations to subrecipients by withholding money, or it risks being denied reimbursement later by the federal government,” says the complaint.

The lawsuit says that DOE is withholding reimbursement for two DEP grants for $127 million to improve energy efficiency in low income homes, as well as an $186 million grant for the Pennsylvania Department of Community and Economic Development’s weatherization assistance program, until DOE completes a review of the grants.

DEP is also unable to receive reimbursements for expenditures of the remaining $76 million in funding that the IIJA allocated to the agency for “plugging, remediating, and restoring orphaned well sites” which, without remediation, serve as a source of greenhouse gas emissions, the lawsuit alleges.

An OMB document issued Jan. 28 stated that the administration’s pause on the disbursement of federal funding is “limited to programs, projects, and activities implicated by the President’s Executive Orders,” including “the Green New Deal,” a phrase which Trump has used to refer to the IRA as well as parts of the IIJA.

The lawsuit asks the court to declare the freeze unlawful and “enjoin the Defendant agencies from freezing, pausing, conditioning, or otherwise interfering with” the disbursement of these funds to Pennsylvania state agencies.

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