Trump administration to release $185M after NC, states prevail in AmeriCorps suit

Nearly $185 million in AmeriCorps funding that was held up by the Trump administration is now on track to be released, following a lawsuit filed by Attorney General Jeff Jackson along with 22 other attorneys general and two governors.

Jackson, a Democrat, announced in a news release on Friday that AmeriCorps has agreed to release all of the previously withheld funding for grants and jobs supporting Western North Carolina recovery from Helene.

“The federal government knew that it would lose against us in court because it had no right to cut funds for AmeriCorps that Congress had already authorized,” Jackson said in the release.

“This money belongs to North Carolina and is crucial for western North Carolina’s recovery. I’m deeply grateful for the AmeriCorps members on the ground who can keep helping our communities rebuild after Helene,” he said.

AmeriCorps is the federal agency that oversees national service programs.

Jackson and the coalition filed the lawsuit against AmeriCorps after funding and jobs were cut earlier this year. The Office of Management and Budget, a part of the executive branch which oversees federal agencies and controls how federal funds are allocated, was added to the lawsuit later.

According to Jackson, several North Carolina programs can now continue, including initiatives that helped with food distribution, housing support, school recovery, debris cleanup and other relief efforts after the remnants of Hurricane Helene hit the state in September 2024.

Initial cuts to Helene funding

In mid-April, AmeriCorps ordered more than 50 full-time volunteers to stop working on Helene recovery in Western North Carolina, as part of terminating more than 750 National Civilian Community Corps volunteers, Jackson’s news release said.

It also cut in late April nearly $400 million in grants, about 40% of its funding allocated across all 50 states, The Charlotte Observer previously reported.

That cut came at the request of the U.S. DOGE Service, with recipients told their award “no longer effectuates agency priorities,” The Washington Post reported.

On April 29, Jackson and the coalition sued AmeriCorps, arguing the cuts were unlawful because Congress had already approved the money.

The cuts are “an unauthorized decision by the administration to dismantle” the agency, said the lawsuit.

In June, a federal judge granted a preliminary injunction restoring all the programs that had been terminated in the state while the case continued, according to Jackson’s release.

But the Office of Management and Budget then began withholding $184 million in funding nationwide, affecting programs across multiple states, including ones in Western North Carolina, Jackson said.

New developments in court case

Jackson and the coalition asked a federal judge to block OMB and AmeriCorps from withholding the money. On Aug. 7, they sought an order requiring the government to release the funds while the case was argued.

The government’s response was due Thursday. But that same day, OMB approved the spending plan for the nearly $185 million. Court documents show the money is now on its way to AmeriCorps programs, expected to be in the agency’s account by Sept. 2 and fully distributed by Sept. 30.

U.S. District Judge Deborah L. Boardman has paused the case and ordered both sides to file a joint status report by Sept. 3.

This story was originally published August 29, 2025 at 2:33 PM with the headline "Trump administration to release $185M after NC, states prevail in AmeriCorps suit."

Luciana Perez Uribe Guinassi

The News & Observer

Luciana Perez Uribe Guinassi is a politics reporter for the News & Observer. She reports on health care, including mental health and Medicaid expansion, hurricane recovery efforts and lobbying. Luciana previously worked as a Roy W. Howard Fellow at Searchlight New Mexico, an investigative news organization.