That one will get overturned.
The Executive Branch has the power to determine the use of the funds in the Discretionary Spending category, and that's the money the Administration is talking about cutting. Also, regarding the other moneys that are earmarked for certain projects or are specifically appropriated for a specific type project (like highway funds, school funds, public safety funds, etc.), in every single law passed that gives funding to state or local governments, or to private entities, there is a mandatory clause inserted requiring that for the grantee to be eligible, they must be in compliance with all federal regulations and laws. States and or local governments knowingly and willingly giving aid and comfort to illegal aliens in contradiction to federal law, regulation, and lawfully issued detainers, are by that action made ineligible for federal funds. The argument being used, that state and local law enforcement cannot be forced to enforce federal law, is wrong on it's face because all that has to happen is for the feds to deputize the state or locals. Secondly, the Supremacy Clause of the US Constitution makes the actions of the state and local governments Un-Constitutional.
This will not survive a SCOTUS review.