Abbott Threatens $200 Million in Funding Cuts Across Texas’s Largest Cities Over ICE Policies

Houston, Dallas, and Austin could lose state public safety grants if they don’t change their policies.
Published: 4/18/2026, 12:07:22 PM EDT
Abbott Threatens $200 Million in Funding Cuts Across Texas’s Largest Cities Over ICE Policies
Texas Gov. Greg Abbott speaks to the media at the Texas Capitol in Austin on Aug. 22, 2025. (Eric Gay/AP Photo)

Texas Gov. Greg Abbott on April 16 threatened to cut more than $200 million in public safety grants from Houston, Dallas, and Austin if the cities continue local policies that Abbott’s office says illegally limit police collaboration with U.S. Immigration and Customs Enforcement (ICE).

Dallas and Austin received formal warning letters on April 16, just days after Abbott had already placed Houston on notice that it could lose approximately $110 million. Dallas could lose more than $32 million in state grants, plus more than $55 million in World Cup public safety funding. Austin could lose roughly $2.5 million.

“Cities in Texas are expected to make the streets safer, not more deadly,” Andrew Mahaleris, Abbott’s spokesperson, said in a statement.

Texas Attorney General Ken Paxton filed a lawsuit on Thursday in Fort Bend County against the City of Houston, Mayor John Whitmire, city council members, and Houston Police Chief Noe Diaz over the same ordinance over which Abbott threatened to strip funding.

“I will not allow any local official to push sanctuary policies that make our communities less safe,” Paxton said. “Under my watch, no Texas city will be a safe harbor for illegals. The Texas Legislature passed strong legislation that specifically stops the type of lawless ordinance that Houston adopted. Houston has no authority to ignore the Constitution and the laws duly enacted by the Legislature. I'm calling on Houston to immediately repeal this ordinance.”

Abbott’s office already froze approximately $110 million in Public Safety Office grants after the Houston City Council voted April 8 to curtail when the Houston Police Department can hold individuals on behalf of ICE, which state officials say violates a grant certification Whitmire signed in April 2025 vowing full cooperation with the Department of Homeland Security.

“This letter serves to notify you that this new ordinance, Section 34-41 of the Houston Code of Ordinances, is in breach of your April 15, 2025, certification and imperils all grant agreements between the City and PSO for Fiscal Year 2026,” Andrew Friedrichs, executive director of the governor's Public Safety Office, wrote in a letter. “Please respond by April 20, 2026, to confirm that the City will not enforce, and will act to repeal, the ordinance. Failure to do so may result in PSO exercising its sole discretion to terminate all such grants."

Mahaleris noted that should Houston fail to repay the funds, the state comptroller would be required to block future state payments to the city until the debt is paid.

Dallas, a host city for the 2026 FIFA World Cup alongside Houston, received its warning letter Thursday. It must reply by April 23.

Neither Houston Mayor John Whitmire's office nor Dallas Mayor Eric Johnson's office immediately returned a request for comment.

Austin received a letter on Thursday in response to a March 4 update to the Austin Police Department General Orders that forbade officers from making arrests or detentions due to ICE administrative warrants. Austin’s deadline for responding to the letter is April 23. The state argues that the city pledged to agree to cooperate with ICE when city officials took public safety grants in February 2025.

Austin Mayor Kirk Watson defended his city’s policy as fully consistent with state law.

"The City of Austin has made great progress on public safety— but our APD officers do not have the capacity—and should not be asked—to do the jobs of other entities. There is great irony that the state would try to punish the City for providing services that keep Austinites safe by threatening grants that keep Austin safe," Watson said in a post on X.

“We don’t have the time and will not play into this political theater.”