Trump to Michigan: Comply with immigration, DEI orders or lose road funding

• Trump administration sets new course on transportation funding, orders states to comply with immigration, DEI policies
• Michigan gets more than $2 billion in road funding from the federal government each year, though it’s unclear whether funds are at risk
• Attorney General Dana Nessel is suing to try to block the potential cuts, arguing Trump is ‘prioritizing political posturing’

President Donald Trump's administration is threatening to withhold transportation funding allocated for Michigan and other states if they fail to assist with immigration deportation efforts or comply with orders to disband diversity, equity and inclusion programs.

Experts say widespread infrastructure cuts in Michigan are unlikely. But the threat should be taken seriously, according to Michigan Attorney General Dana Nessel, a Democrat who is part of a multi-state lawsuit seeking to head off any cuts before they happen.

“The Trump administration is illegally tying immigration enforcement demands to vital federal funding grants that have absolutely nothing to do with immigration,” Nessel said in a statement, claiming Trump is “prioritizing political posturing over the safety and well-being of Americans.”

US Transportation Secretary Sean Duffy last month warned states and other grant recipients that their funding could be revoked if they don’t cooperate with federal authorities on immigration enforcement or if they maintain any DEI programs. 

“It is the policy of the department to award and to continue to provide federal financial assistance only to those recipients who comply with their legal obligations,” Duffy told officials in a letter, adding that the department would “vigorously enforce” the policy and audit grantees’ compliance.

And this week, the Trump administration took steps to dismantle the federal Disadvantaged Business Enterprise program, which the Michigan Department of Transportation and other state agencies have used for decades to ensure women- and minority-owned businesses win a certain percentage of federal contracts. 

The Department of Justice this week sided with two Indiana construction firms suing the federal Department of Transportation, proposing a settlement that would effectively end the DBE program if courts approve. 

The directives come as the Trump administration eyes other possible changes to the way the federal government awards transportation funding, including prioritizing regional marriage and birth rates when considering grant applications. 

Duffy has described the proposed shift as “restoring commonsense governance and merit-based policies” and said US citizens “deserve an efficient, safe and pro-growth transportation system.”

Federal funding accounts for $2.3 billion — or 33% — of MODT’s current budget.

Industry experts told Bridge Michigan that the bulk of the state’s existing federal dollars  — formula-based funding that helps cover construction and maintenance costs for state highways, public transit, rail and airports — are not expected to see cuts. 

But the future of more than a dozen Michigan projects awarded a cumulative $500 million under former President Joe Biden remains in limbo. The Trump administration froze grant funds from the 2021 Infrastructure Investment and Jobs Act while federal agencies review whether the grants comply with the president’s policy goals. 

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According to MDOT, three of 17 pending IIJA grants have been approved to move ahead with the grant agreement process, including $20.4 million for a project to replace a railroad bridge over the Manistee River, which was included in the US Department of Transportation’s latest round of federal transportation grants on May 6. 

Other unfrozen funds include a $467,000 grant for a wildlife crossing pilot and a $552,000 grant for thermal imaging cameras on transit vehicles to prevent pedestrian crashes.

What’s at stake

Michigan’s paved federal-aid roads make up one-third of the state’s roadways and carry more than 95% of overall traffic, according to the Transportation Asset Management Council. 

They’re funded in part by the Federal-Aid Highway Program, which historically funnels multi-year funding to states through a formula that considers population size, density and other factors.

“The goal of the formula is to allocate it by need — how many roads do we have, what's the lane mileage and so forth,” said Bob Schneider, of the nonpartisan Citizens Research Council.

The 2021 act approved by Congress authorized $356.5 billion in spending through 2026, with Michigan getting an estimated $1.6 billion per year.

Because that formula is written into federal law, those funds are likely secure, said Lance Binoniemi, of the Michigan Infrastructure and Transportation Association, a trade group representing the construction industry. 

But individual Biden-era transportation grants could end up on the chopping block — and any reduction in transportation funds “just exacerbates the problem that we already have in our funding,” Binoniemi said. 

In the multistate lawsuit challenging the Trump administration’s directive, Nessel and other attorneys general specifically referenced a project to reconstruct the high-traffic I-75 bridge over River Raisin in Monroe County, for which Michigan was awarded $196 million in federal grants before the funds were paused. 

Another $73.5 million supporting a new bridge to separate M-85 from a busy railroad crossing in Trenton is also on hold, as is $25 million for replacement of the East Beltline Bridge in Grand Rapids, $25 million for rebuilding a 2-mile stretch of US-12 in Corktown and a $34.2 million investment in local bridge replacements around the state. 

Is Michigan funding at risk? 

It’s unclear whether MDOT could be targeted by the Trump administration because of other state-level immigration or DEI policies. 

MDOT spokesperson Jocelyn Garza said the state agency hasn’t heard from the federal government since Duffy’s April letter. 

The department currently maintains a Disadvantaged Business Enterprise program, a state offshoot of the Reagan-era federal program aimed at increasing access to federally funded contracts for minority-owned and women-owned businesses that's currently being challenged in court.

MDOT officials told the Detroit Free Press in January that the program, which reported $117.1 million of $1.3 billion in federally-funded contracts went to designated disadvantaged business enterprises, was not directly impacted by the initial flurry of Trump executive orders seeking to root out DEI programs. 

Barring additional federal court action or updated guidance from the federal government, Garza said the state’s 2025 DBE goal is 9.5%.

It's also unclear whether any local road agency funding could be directly impacted by the federal directives. 

East Lansing, where local law enforcement does not cooperate with federal immigration agents, may be the only vocally “sanctuary city” in the state, though six Michigan counties and two cities were included on a Department of Homeland Security list of “sanctuary jurisdictions defying federal immigration law.” 

Detroit has proclaimed itself a “welcoming city,” but Mayor Mike Duggan has said local officers will comply with immigration authorities.

‘Cut out the controversy’

Many local agencies are more concerned about what happens in 2026, when existing federal transportation funding comes up for renewal. 

Trevor Layton, communications manager for the Southeast Michigan Council of Governments, said his group has already been to Washington to advocate for continued support in the next infrastructure funding bill.

The goal, he said, is to “cut out the controversy,” and focus on shared priorities as much as possible, such as building out reliable, family-friendly infrastructure in cities and small towns alike. 

Without federal support, “the condition of the system would be severely, severely impacted, and it would tremendously impact people's ability to move around the region and to other places on a day-to-day basis,” Layton said.  

In a series of memos and executive orders earlier this year, Duffy at the US Department of Transportation vowed to prioritize future funding for areas with higher-than-average marriage and birth rates and bar grant recipients from imposing vaccine or mask mandates, though it remains unclear how those policies would be implemented.

Such a plan, if enacted, could disproportionately impact cities like Detroit, where roughly three in four adults are unmarried and more than a third of residents struggle with reliable transportation, according to BridgeDetroit reporting. 

Michigan’s marriage rates are slightly behind the national average, and the state currently ranks 32nd in the nation for overall marriage rates. In 2022, roughly 16 out of every 1,000 Michigan women got married, according to US Census Bureau data. 

Large-scale transportation projects typically take years to plan and build out, said Ed Noyola, of the Michigan County Road Association. 

Local governments get 25% of the state’s current federal aid allocation, he said. If the future of those funds are uncertain, “it becomes a problem for us to be able to continue on schedule.”

What state officials might do

Federal spending aside, industry advocates have long stressed the need for major new investments to shore up the state’s crumbling infrastructure.

A 2023 study from the Michigan Infrastructure and Transportation Association — a construction industry group — projected that state officials need to spend $3.9 billion more per year to fully fund repairs. 

Proposals to come up with that kind of cash have proven politically unpopular, and, though public officials have flirted with new funding concepts like mileage fees and tolling, nothing has stuck. 

As of 2024, only 28% of Michigan’s federal aid-eligible roads and 33% of bridges were in good condition, according to the Michigan Transportation Asset Management Council’s annual analysis of state road quality. 

Gov. Gretchen Whitmer, the Republican-majority Michigan House and the Democratic-majority Senate have all signaled interest in a $3 billion long-term funding deal, but clashes over how to get there and budget constraints could complicate that goal. 

House Republicans are opposed to increasing taxes, while Whitmer has advocated for a mix of new revenue sources and “fiscally responsible cuts.” 

State officials also have roughly $456 million less in incoming revenue to work with as they craft the next state budget, with more changes possible amid the Trump administration’s downsizing of the federal government and proposed cuts to federally funded programs like Medicaid and food assistance pending in Congress. 

Experts warn that all could equate to less money to go around for roads and other priorities as state lawmakers work to prepare a budget before the Oct. 1 deadline. 

“We probably have some challenges coming one way or the other with the budget from some of the federal austerity measures,” said Schneider, of the Citizens Research Council. “Whatever the resolution … we're probably going to incur some additional costs that right now the federal government's picking up.”