Significant cuts to federal disaster funding are under consideration in some circles, threatening to leave counties scrambling to pick up the pieces. These proposed changes would dump a crushing financial burden on state and local governments, forcing them to shoulder the overwhelming costs of recovery, rebuilding, and community support after crises.

FEMA Cost-Sharing Reductions

Today, the Federal Emergency Management Agency (FEMA) pays for a maximum of 75 percent of disaster expenses, with state and local governments covering the rest.

The proposals would slash federal support to 25 percent for “smaller” disasters, with cost-sharing reaching a maximum of 75% for “truly catastrophic disasters.” That change would put counties in a financial bind that could delay rebuilding and strain budgets.

Higher Bar for Federal Aid

Proposals to raise the per-capita threshold for disaster declarations, the minimum level of damage per resident required for an area to qualify for federal disaster relief, could make it far more difficult for counties to access federal support.

Increasing this threshold would mean that many rural and sparsely populated areas—where even moderate disasters cause severe financial strain—might no longer meet the criteria for federal aid. As a result, local and state governments would need to tap into already limited resources to help their communities recover, further stretching thin budgets and delaying vital recovery efforts.

Private Flood Insurance: A Risky Bet

Replacing the National Flood Insurance Program with private insurance could leave flood-prone communities at risk. Residents might face sky-high premiums or coverage gaps, making recovery efforts far more complicated and costly for states and local governments.

Loss of Emergency Preparedness Grants

Cutting FEMA preparedness grants would erode the safety net counties rely on to respond to disasters. The Maryland Department of Emergency Management (MDEM) and local governments use this funding for crucial infrastructure upgrades, responder training, and risk reduction. Without it, communities become even more vulnerable.

Local and State Strain

Disaster recovery starts at the local level but relies on solid state and federal partnerships. For more minor disasters that don’t qualify for federal aid, counties already face challenges accessing underfunded and fragmented state relief programs. This reality could delay critical recovery and strain MDEM’s ability to act swiftly.

Maryland’s Limited State Disaster Recovery Fund

MACo backed the creation of a State Disaster Recovery Fund, managed by MDEM, to fill the gaps when federal aid falls short. However, with no dedicated revenue source, its impact remains limited. The situation worsened when Governor Wes Moore’s mid-year budget shifts cut the fund by 25 percent, leaving only $1.5 million for future disasters.

The Stakes for Local Governments

To make these federal changes a reality, Congress must pass new legislation. The National Association of Counties (NACo), along with organizations like the National Emergency Management Association (NEMA) and the International Association of Emergency Managers (IAEM), will undoubtedly engage in these discussions, advocating for fair disaster relief that keeps communities safe and resilient.

Counties and MDEM stand on the front lines of disaster response, recovery, and rebuilding. Without sustainable state and federal support, local governments risk longer recovery times, delayed rebuilding efforts, and a diminished ability to protect their residents when disaster strikes.

Stay tuned to Conduit Street for more information.