Federal court blocks DOT condition tying transportation funds to immigration cooperation; committee hears federal budget risks for Madison

On June 23, 2025, the Madison Finance Committee received two federal updates: a legal briefing on a recent federal court decision related to a U.S. Department of Transportation directive, and a presentation on the status and potential local impacts of pending federal budget proposals.

Attorney Mike Haas told the committee that a federal district court in Rhode Island issued a preliminary injunction last week that prevents the federal government from enforcing the April directive tying federal transportation funds to local cooperation with immigration enforcement. Haas said the court’s order applied to the parties in the case and that Wisconsin’s attorney general had joined the suit — a factor Haas said that supports the injunction covering Wisconsin jurisdictions, including Madison. "The court issued a preliminary injunction which prohibits the federal government from implementing that directive," Haas said.

Haas cautioned the ruling is a district court decision that could be appealed, but he said the injunction reduces a near‑term legal risk to the city because Madison’s practices do not conflict with federal enforcement in the way the directive described.

In the grants and budget briefing that followed, Director Dave Schmidke summarized the Senate committee’s draft federal budget and Moody’s Analytics projections on fiscal effects. Schmidke highlighted areas of potential local impact if national proposals proceed as drafted: Medicaid changes, supplemental nutrition assistance reductions, and broader deficit and interest‑cost implications that could ripple to states and localities.

Schmidke presented staff estimates that, under some proposed federal changes, about 6,200 Madison residents could lose Medicaid coverage over a 10‑year period (mainly childless adults without disabilities) and that about 1,952 adult residents could be at risk of losing SNAP benefits; he emphasized that these are staff estimates and depend on final federal actions. He also said federal pandemic transit aid has declined, contributing to the projected increase in Madison’s Metro Transit subsidy.

The committee discussed timing and uncertainty: Schmidke said the Senate aims for passage by early July but that geopolitical events and inter‑house differences—particularly on SALT (state and local tax) deduction rules, clean energy credits and Medicaid policy—could delay or alter outcomes. He noted the federal debt and rising interest costs could constrain federal support to states and localities, and said the city will continue to monitor legislation, litigation and federal agency guidance.

Ending: Haas and Schmidke said the city will continue to monitor appeals and federal budget negotiations; no committee action was taken at the meeting on either topic.