Maryland Attorney General

Wisconsin, joined by a dozen other states, has filed a federal lawsuit against the Trump administration over the termination of grant funding meant to modernize state unemployment insurance systems. The suit, led by Wisconsin Attorney General Josh Kaul and Maryland Attorney General Anthony Brown, was filed in the U.S. Court of Federal Claims and argues the terminations breached the states' grant agreements.

Wisconsin began updating its unemployment system, which dates to 1970, after the COVID-19 pandemic overwhelmed it and delayed benefits for residents. A 2021 state law authorized roughly $100 million for the overhaul, with nearly $80 million in federal funding secured under the Biden administration via the American Rescue Plan Act. In May 2025, the U.S. Department of Labor told Wisconsin it was ending the grant, saying it no longer aligned with the department's funding priorities; officials later cited efforts to curb fraud and waste. More than $45 million was terminated across the states involved, about $10 million of it for Wisconsin, forcing the state to cancel its IT modernization contract and halt a fraud-detection database project.

Wisconsin Attorney General Josh Kaul and Maryland Attorney General Anthony Brown are co-leading a multistate lawsuit against the Trump administration over its decision to terminate more than $45 million in grant funding for unemployment insurance modernization programs. The grants, originally awarded to states under the American Rescue Plan Act, were intended to upgrade unemployment insurance technology and improve fraud prevention.

The U.S. Department of Labor notified states in May 2025 that it would end the funding, saying the programs no longer matched its grant priorities. Wisconsin alone lost roughly $10 million and had already spent $8.2 million on upgrades it cannot recover, forcing its Department of Workforce Development to halt work and seek a new vendor. The lawsuit claims the Labor Department violated grant agreements, imposed new conditions improperly, and denied states adequate notice or a chance to object. Ten additional attorneys general, plus the governors of Kentucky and Pennsylvania, have joined the suit, with Wisconsin Gov. Tony Evers also voicing support, arguing the cuts contradict the administration's stated anti-fraud goals.