The Education Department is getting set to withhold about $18 million in grants from schools in Connecticut if they continue to permit transgender students to compete on teams that correspond with their gender identity.

The New York Times reported the grants are intended to help schools desegregate. The money was to go to districts in New Haven, Hartford, and southeast Connecticut that operate magnet schools under an approved federal voluntary desegregation plan.

But the Education Department said it will not release the funds on Oct. 1, as planned, unless school officials take action.

The move to withhold the money could have national implications, according to the newspaper.

The Education Department wants the schools to withdraw from the Connecticut Interscholastic Athletic Conference due to the organization’s transgender policy. But conference officials maintained their policy conforms to state law.

And New Haven Mayor Justin Elicker blasted the move.

“It’s effectively extortion,” he said. “The federal government is trying to force us to take a side against transgender individuals.”

Angela Morabito, a spokeswoman for the Education Department, said: “It’s not extortion to require school districts to follow federal law. In fact, it’s the opposite. Congress requires the department to withhold funds from schools that aren’t in compliance with the law.”

Meanwhile, the families of three female high school runners filed a federal lawsuit earlier this year seeking to block transgender athletes in Connecticut from participating in girls’ sports.

“Forcing them to compete against boys isn’t fair, shatters their dreams, and destroys their athletic opportunities,” attorney Christiana Holcomb said.