Cities Sue DHS Over Withholding of Anti-Terrorism Grants Tied to Local Election Changes

The federal government controls counterterrorism funding, while local governments control how elections are run. For decades, these two spheres operated independently. Now, they are colliding in federal court as municipalities fight to keep their emergency preparedness budgets without ceding control over their voting booths.

Four major jurisdictions—Harris and El Paso Counties in Texas, Nashville and Davidson County in Tennessee, and Columbus, Ohio—have sued the Department of Homeland Security (DHS). They are challenging a new rule that withholds 20% of federal anti-terrorism grants unless cities adopt a specific slate of election administration changes.[1][3][4]

At the center of the dispute is the Homeland Security Grant Program (HSGP), a $1 billion annual fund created by Congress in 2002. Historically, this money flows through the Federal Emergency Management Agency (FEMA) to help local governments buy hazmat gear, chemical detection systems, and bomb-disposal robots.[3][4][5]

In June 2026, FEMA announced five new conditions for the grant. To receive their full funding allocation, local governments must transition to hand-marked paper ballots, eliminating machines that use QR or bar codes.[1][2][4]

The mandate also requires manual audits of at least 5% of ballots cast in federal elections and strict reconciliation of voters and ballots. Finally, jurisdictions must run their voter registration lists through the Systematic Alien Verification for Entitlements (SAVE) system, a federal database originally designed to check immigration status for benefits.[1][3]

The coalition of cities and counties argues that FEMA lacks the congressional authority to tie counterterrorism funding to election procedures. In their petition, filed in the US District Court for the District of Columbia, the plaintiffs state that implementing these changes would cost millions of dollars and require a hurried overhaul just months before the midterm elections.[1][2][4]

The financial stakes are significant for local emergency responders. In Ohio, the city of Columbus is slated to receive roughly $3.6 million in the 2026 fiscal year. Under the new policy, the city would lose more than $700,000 if it does not alter its election systems—money previously used to equip SWAT teams.[5]

The requirement to use the SAVE system has generated particular friction. The database has been criticized for misidentifying naturalized citizens as noncitizens. In July 2026, the Texas Secretary of State's Office had to direct county officials to reinstate over 2,700 registered voters who were incorrectly flagged by the system.[1][2]

DHS officials argue the requirements are a necessary evolution of national defense. DHS Secretary Markwayne Mullin has stated that the measures are designed to protect election systems from foreign interference, insider threats, and cyberattacks, drawing a direct line between election integrity and national security.[5]

A FEMA spokesperson noted that the agency anticipated partisan pushback but maintained that the grant conditions are common-sense measures. The agency has required grant recipients to explain how they use funds for election security since 2023, but this marks the first time it has mandated specific procedural changes.[1][2]

The tension extends beyond the plaintiffs. The Maryland Department of Emergency Management recently alerted its local partners to federal funding holds affecting 2025 and 2026 grants. Maryland already uses paper ballots and conducts risk-limiting audits, but the new federal requirements go beyond the state's existing practices.[3]

The lawsuit argues that the Constitution delegates election administration to the states, not to federal emergency management agencies. The plaintiffs contend that such a transformative assertion of federal authority requires clear and explicit authorization from Congress, which FEMA does not possess.[4]

As the 2026 midterms approach, local election administrators are caught in a bind. Without a federal injunction, they must either rapidly overhaul their voting infrastructure and auditing processes or absorb a 20% cut to their homeland security budgets.

The outcome of the case will likely set a precedent for how the federal government can use its spending power. It will test whether counterterrorism grants can be leveraged to standardize local administrative duties, redefining the relationship between federal security agencies and municipal election boards.