August 14, 2025
Funds

NYS bill counteracts federal government withholding state funds


A bill in New York would counteract the federal government’s withholding of state funds. The RECOURSE Act would let the state withhold payments to the federal government only after it withholds funding for New York programs. The bill comes after the Trump administration withheld $464 million for education funding.

Assemblymember Micah Lasher, D-Upper West Side, the bill’s co-sponsor, said the withheld funds could come from many sources, but one in particular could be costly.

“The most significant of those categories are the federal withholdings the state makes on behalf of the federal government from the paychecks of state employees, which amount to somewhere in the neighborhood of $3 billion to $4 billion a year,” he explained.

Lasher noted that feedback to the bill has been positive, although some lawmakers feel this is an odd way of addressing federal funding challenges. He said it is hard for people to wrap their heads around since it breaks from traditional responses. But, Lasher hopes as more people learn about the bill, it will garner enough support to be passed during next year’s legislative session.

Beyond this bill, states do not have much else they can do to hold the federal government accountable. But, simply withholding funds is not the only approach New York is taking. Lasher introduced another bill taking a different approach if federal funds are being withheld in violation of a court order or breaking the law.

“That bill would authorize, in that circumstance, the state to put liens on federal property, and it’s noteworthy that in the early days of the Trump administration, they published a list of, I think, more than 400 properties across the country owned by the federal government they were interested in selling,” he continued.

Passing this second bill would prevent the federal government from making money by trying to sell any of its New York properties. Lasher argued that the unorthodox actions taken by the Trump Administration warrant an equally unorthodox response, and added that beyond litigation, there has to be a new playbook for dealing with these challenges.

“The point of the RECOURSE Act is we’re now in an environment and a moment when even litigation, even successful litigation, even a court order may not get the federal government back on track,” he concluded.





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