U.S. House passes final minibus funding package

Key Takeaways

On January 22, U.S. House passed the final Fiscal Year 2026 (FY 26) appropriations minibus package covering Defense, Labor-Health and Human Services-Education, Homeland Security and Transportation-Housing and Urban Development. This final minibus funding package comes after the Interior-Environment, Commerce-Justice-Science and Energy-Water and Financial Services and General Government appropriations spending packages were introduced. The bill now moves to the U.S. Senate for consideration. 

The package funds key federal programs that support county governments, including transportation, housing, health, emergency management and public safety. 

In addition to funding multiple federal agencies and program, it also includes the approval of approximately $6.3 billion in Community Project Funding, also referred to as congressional designated funding for the U.S. Departments of Homeland Security (DHS), Housing and Urban Development (HUD) and Transportation (DOT). 

What is included in the package? 

U.S. Department of Defense Appropriations 

Provides a total of $839.2 billion in discretionary funding with $180 million in nondefense spending. Other allocations of interest to counties include: 

• Provides $193.3 billion in basic pay for military personnel including 3.8 percent pay raise for service members
• Provides funding hosting military installations and National Guard facilities to benefit from sustained operations, local coordination, and impact aid for school districts

Counties play a critical role in supporting military installations and providing housing for military personnel and their families. In addition, military installations provide counties with increased economic development. Increased funding for installation infrastructure housing development and community services strengthens counties’ ability to address local housing shortages, support quality of life and sustain mission readiness.

U.S. Department of Labor, Health and Human Services and Education

Total funding provides $221 billion and supports critical county operated programs and services in health and human services, education, and workforce. At the same time, the bill reduces administrative funding across federal agencies and eliminates certain public health and social policy programs.

• Provides $810.4 million for programs under Community Services Block Grant Act (CSBG)
• Provides $418 million for rural health programs, an increase intended to support rural hospitals and primary care access
• Increases funding for mental health and substance use block grants, including State Opioid Response Grants and Certified Community Behavioral Health Clinics
• Provides $20 million increase for the Low-Income Home Energy Assistance Program (LIHEAP)
• Allocates $8.8 billion for the Child Care and Development Block Grant, supporting working families
• Provides $12.4 billion for Head Start to support school readiness of children from low-income families
• Provides $7.4 billion for the Substance Abuse and Mental Health Services Administration (SAMHSA)
• Provides $4.6 billion for the Community Health Center Fund through FY 2026, plus an additional $1.159 billion through the end of calendar year 2026, supporting Federally Qualified Health Centers (FQHCs)
• Eliminates scheduled Medicaid Disproportionate Share Hospital (DSH) cuts for FY 2026–2027 and expands DSH payment calculations to include the uncompensated care costs of dually eligible individuals

Counties serve as the primary safety net for health and human services. Increased funding for rural health, behavioral health, childcare and energy assistance supports locally administered health and human service programs, while program eliminations and administrative reductions may affect implementation and capacity.

Department of Homeland Security

Total funding provides $64.4 billion in discretionary funding, including $32 billion for the Federal Emergency Management Agency (FEMA) a $4.7 billion increase above FY 2025 enacted levels, driven largely by additional resources for disaster response and recovery.

• A NACo-authored provision in the DHS appropriations bill would require FEMA to create a Public Assistance dashboard, giving counties project-level visibility into reimbursements, approvals and timelines and improving transparency, accountability and disaster recover oversight
• Provides $26.4 billion for the Disaster Relief Fund
• Provides $3.8 billion for preparedness grants, training and exercises for state and local first responders
• Provides $272.7 million for community projects

Counties are on the front lines of disaster preparedness, response and recovery. Increased FEMA funding directly supports county emergency management agencies and aligns with county’s priority to strengthen disaster resilience and recovery capacity.

Transportation Housing and Urban Development and Related Agencies
Total funding provides $102.495 billion that includes $25.136 billion in discretionary funding for the U.S. Department of Transportation and $77.3 billion for the U.S. Department of Housing and Urban Development. 

• $2.3 billion of the funding for the Department of Transportation is previously appropriated funding from the Infrastructure Investment and Jobs Act (IIJA) that is being redirected to other programs including $879 million from electric vehicle and emission reduction programs and almost $205 million from the Strengthening Mobility and Revolutionizing Transportation (SMART) Grant Program
• Provides $64.323 billion for the Federal Highway Administration, an increase of $1.93 billion above Fiscal Year 2025 enacted levels
• Funding for the Federal Aviation Administration by $1.22 billion above FY 2025 to a total of $18.6 billion
• Increases funding allocation percentages from the Safe Streets and Roads for All (SS4A) grant program to be used for capital projects to 40 percent, as opposed to the original 30 percent cap included in the IIJA
• Provides $3.3 billion for the Community Development Block Grant Program
• Allocates $4.4 billion for Homeless Assistance Grants
• Funds $1.25 billion for the HOME Investment Partnerships program
• Provides funding of $3.786 billion in Community Project funding

Counties own and operate 44 percent of public roads, 38 percent of bridges, and 34 percent of airports nationwide being responsible for the nation’s road miles and operate many public airports. Counties are also essential for federal partners in delivering programs and services supporting affordable housing, community development, emergency rental assistance for housing affordability and are key partners in delivering services funded by the Community Development Block Grants HOME Investment Partnerships and HUD rental assistance programs.