HARRISBURG — Gov. Josh Shapiro said the administration of President Donald Trump has freed up all $2.1 billion of federal funding that was either frozen or in some way blocked soon after the president assumed office.
Mr. Shapiro, who filed a lawsuit over the freeze earlier this month, said the federal action came as the result of “direct engagement” he had at the White House last week with senior Trump administration officials.
“Every single dollar that we identified at the filing of our lawsuit is currently unfrozen and once again accessible to Pennsylvania state agencies,” Mr. Shapiro told reporters. “We now will resume critical programs and infrastructure projects that have been jeopardized by this illegal freeze.”
When he filed the lawsuit, Mr. Shapiro, a Democrat, said $1.2 billion of money intended for Pennsylvania was frozen and another $900 million required “an undefined review by federal agencies” before it could be drawn down.
Mr. Shapiro was in Washington, D.C., late last week for the 2025 winter meeting of the National Governors Association. He was also chosen by the president to be one of 10 new members to lead the bipartisan Council of Governors.
The firestorm over frozen funding broke out with the issuance of a memo by the Office of Management and Budget on Jan. 27, less than a week into Trump’s second presidency. Mr. Shapiro said the next afternoon that state employees “literally can’t access the payment systems and the computer systems” used to run high-profile federal-state programs.
Although the memo was later rescinded, the federal move created chaos at organizations that rely on federal funding, with local officials and nonprofit leaders scrambling to figure out how their clientele might be affected.
Mr. Shapiro said on Monday that when word first broke that federal money for some joint federal-state programs like Medicaid and HeadStart could not be accessed, his administration tried to work with federal officials to resolve the problem.
“Legal action was not my first choice,” said Mr. Shapiro, who previously was state attorney general.
When those efforts failed, he said, the underpinnings of the lawsuit were obvious. “This is basic stuff,” Mr. Shapiro said.
Congress, he said, passes laws committing billions of dollars to the states; the president signs the laws; and the federal government and states sign contracts laying out the handling of the money.
“Those agreements are binding,” Mr. Shapiro said. “To put it simply, a deal is a deal. The Trump administration is legally required to provide these funds to Pennsylvania.”
Some of the work that had been affected by the frozen or blocked funding included plugging orphan wells, cleaning up waterways, and dealing with abandoned mines, Mr. Shapiro said.
The Pennsylvania Department of Environmental Protection was unable to access the $76 million that it still had to spend under the program after the executive orders were signed, Mr. Shapiro said in his lawsuit.
That sent panic through the supply chain that had been ramping up to tackle this major environmental hazard in the state, which had, for years, received very little funding.
Luke Plants, CEO of Bradford-based oil and gas well plugging firm Plants & Goodwin, said last week that the uncertainty over the billions of dollars already allocated but not yet disbursed is holding his company back from hiring more workers, ordering new equipment, and expanding into new areas.
“We want to start going to areas like Texas and Western Canada,” he said. “We’re looking to rapidly grow this year.
Mr. Plants’s sense was that the state was holding back on issuing new well plugging contracts until it had more information from the Department of Interior, the federal agency that administers those funds.
DEP spokesman Neil Shader said that’s because even when a certain amount of money is approved by the federal government for a specific purpose, it rarely gets transferred in whole into state coffers. Instead, the state would solicit bids, select one, run it past the Department of Interior for approval, issue the contract then collect the invoice and submit that to the federal agency for reimbursement.
That means anything subject to that process has been up in the air over the past several weeks.
It is now unfrozen.
Pennsylvania is still finalizing the terms of its Rise PA program, which was approved for $396 million in federal funding from the Inflation Reduction Act of 2022. Rise PA will fund large industrial decarbonization projects – retrofits and upgrades to existing industrial facilities that reduce carbon emissions below a certain threshold.
The much-anticipated program was scheduled to begin accepting applications within weeks of the funding freeze.
The funding thaw also clears the way for Pennsylvania to launch its Penn Savers program, which will offer rebates on energy-efficient upgrades and appliances, such as heat pumps, insulation and electric stoves.
Reporter Anya Litvak contributed to this report
First Published: February 24, 2025, 9:27 p.m.
Updated: February 25, 2025, 6:55 p.m.
