Texas Gov. Greg Abbott is warning that Houston, Dallas, and Austin could lose roughly $200 million in state funding if they do not change local policies that limit cooperation between city police departments and federal immigration authorities.

The dispute centers on municipal rules that instruct officers not to extend traffic stops or detentions solely to assist U.S. Immigration and Customs Enforcement operations. Abbott’s office argues those policies conflict with Senate Bill 4, a state statute requiring local governments to cooperate with federal immigration enforcement and prohibiting so-called sanctuary policies.

According to state officials, Houston faces the largest potential reduction, with about $110 million in public safety-related grants at risk. Dallas could lose more than $87 million when including funding tied to security preparations for major events, while Austin risks a smaller but still significant reduction tied to public safety programs.

Abbott spokesperson Andrew Mahaleris said the state expects cities to support enforcement efforts, arguing that public safety is undermined when local policies restrict cooperation with federal authorities.

The governor’s office has expanded its review beyond Houston in recent days, signaling a broader enforcement push across Texas’ largest metropolitan areas.

The conflict reflects a long-running debate in Texas over immigration enforcement authority. Republican state leaders, including Attorney General Ken Paxton, have pursued legal action against cities that they say are not complying fully with state law, including lawsuits aimed at blocking local ordinances.

Local officials have defended their policies, arguing they are intended to maintain community trust and ensure officers focus on core public safety responsibilities. Houston Mayor John Whitmire described the dispute as a distraction from public safety priorities, while Dallas and Austin officials have emphasized compliance with both state and federal law.

Austin Mayor Kirk Watson said city police should not be required to take on federal immigration duties, while warning that cutting funding would undermine services designed to improve safety.

The outcome of the standoff could determine whether Texas cities revise their immigration enforcement policies or risk losing critical funding tied to policing, emergency response, and major public safety operations.