White House releases FY 2026 Budget Request: Top Highlights to Counties

Key Takeaways

On May 2, the White House released the President's Budget for Fiscal Year (FY) 2026, outlining the administration's proposals for budgetary spending for the fiscal year beginning October 1, 2025. The President’s budget requests cutting non-defense discretionary funding by 23 percent, amounting to $163 billion, and proposes a 7.6 percent spending cut to discretionary spending. This budget proposal reflects the administration’s priorities but is unlikely to be passed in its current form and will need to be approved by Congress to be implemented.  

NACo has compiled a breakdown of what changes would most directly impact county governments and our residents. To read the full President’s Budget request, click here.  

Top Highlights for Counties: 

• Cuts to the Federal Emergency Management Agency's (FEMA) non-disaster grant programs, representing an almost 20 percent decrease of the total FEMA grant portfolio.
• Elimination of the Economic Development Administration, which helps counties invest in infrastructure, workforce development and small business support to help bolster local economic prosperity and resilience.
• Significant Cuts to Vital Housing Programs such as the Community Development Block Grant (CDBG); HOME Investment Partnerships Program (HOME); and the Pathways to Removing Obstacles (PRO) Housing program.
• Increased investment in critical infrastructure programs including $770 million for the Infrastructure for Rebuilding America (INFRA) grant program, $400 million for rail safety grants and $824 million for Federal Aviation Administration (FAA) upgrades at airports—including county-owned airports—across the country.
• Cuts to the Essential Air Service program, which provides subsidized commercial air service in rural areas across the country, through changes to eligibility and subsidy rates.
• Increased investment in critical infrastructure programs, including $824 million for Federal Aviation Administration upgrades at airports. This includes county-owned airports across the country.
• Reduces U.S. Department of Agriculture Rural Development funding by $721 million and eliminates key programs supporting rural housing, broadband, water systems and public facilities.
• Establishes a new $100 million Rural Financial Award Program, offering competitive funding to improve financial infrastructure and expand capital access in underserved rural areas
• Cuts nearly $1.4 billion from U.S. Forest Service operations, scaling back federal support for wildfire mitigation, forest health, forest product research & development, recreation and watershed protection.
• Creates a new Federal Wildland Fire Service within the U.S. Department of the Interior (DOI) by consolidating wildfire responsibilities currently split between USDA and DOI agencies, which may improve coordination but could also impact how counties engage with federal partners and access resources for local fire management.
• Ends $291 million in discretionary awards for the Community Development Financial Institutions (CDFI) Fund, limiting rural communities’ ability to expand access to capital, support small businesses and drive local economic growth.
• Eliminates $3.6 billion in funding for six regional commissions, cutting off place-based federal investment in distressed rural regions outside the Appalachian Regional Commission’s footprint. 

• Elimination of FEMA's Shelter and Services Program, which provides funding to counties to offset the costs of food, shelter and other supportive services for migrants. 

• Elimination of the Low-Income Home Energy Assistance Program (LIHEAP), which helps low-income households pay their heating and cooling bills.
• Elimination of the Community Services Block Grant (CSBG), which supports local agencies in designing and implementing anti-poverty programs.
• Reduces the U.S. Department of Education’s budget by $12 billion but preserves Title l and Individuals with Disabilities Education Act (IDEA) funding.

• Reductions to the Clean and Drinking Water State Revolving Loan Funds, which would impact counties’ ability to maintain and improve water infrastructure without raising rates for residents.

• Cuts to the Cybersecurity and Infrastructure Security Agency, which impacts technical services provided to state and local governments through programs like the Multi-State/ Elections Infrastructure Information Sharing and Analysis Center (MS/ EI- ISAC).

• Reductions to the U.S. Department of Health and Human services, reducing the budget by 26 percent from FY 2025 and impacting agencies like the National Institute of Health (NIH), Centers for Disease Control and Prevention (CDC) and Centers for Medicare and Medicaid Services (CMS).

• Cuts to the Health Resources and Services Administration, which includes a $74 million reduction in non-clinical Ryan White HIV/AIDS activities, a $274 million cut to Maternal and Child Health programs and a $1 billion cut to health workforce training and scholarships.

• New $500 million request for the “Make America Healthy Again” initiative, aimed at improving nutrition, reducing reliance on medications and strengthening food and drug safety.