White House Releases Budget Request for FY 2027: Analysis for Counties

• Eliminates the Community Development Financial Institutions (CDFI) Fund, limiting rural communities' ability to expand access to capital, support small businesses and drive local economic growth.
• Provides $50 million for the U.S. Department of Agriculture (USDA) to implement the reorganization plan, relocating operations and staff to regional hubs around the country.
• Eliminates discretionary funding for Rural Business-Cooperatives Service.
• Eliminates $659 million in Congressionally Directed Spending for rural community development projects through the Community Facilities Grant Program.
• Maintains funding for the USDA Rental Assistance Program and requests authority to decouple Rental Assistance from the Multi-family Housing Direct Loan program, allowing RHS to continue offering rental assistance to properties that no longer have an RHS-financed loan.
• Reduces funding for Section 502 guaranteed home loans from $25 billion to $20 billion.
• Eliminates funding for the Rural Business and Industry Loan and Grant Program, Rural Business Investment Program, Rural Development Loan Fund and High Energy Cost Grants Program. 

• Eliminates the Community Development Block Grant (CDBG) program. The CDBG program provides versatile, direct-to-county funding for a wide range of housing and community development needs.
• Eliminates the Home Investment Partnerships (HOME) program, a vital federal-local partnership used to develop affordable housing and lower costs.
• Reduces homeless assistance grant funding and restructures the Continuum of Care and Emergency Solutions Grant programs to prioritize transitional housing and conditional treatment in lieu of "housing first" approaches.
• Eliminates funding for the U.S. Economic Development Administration, threatening critical support for economically distressed communities.
• Consolidates workforce development activities under the Make America Skilled Again grant.
• Eliminates the Job Corps program, which aligns young adult training programs with local employer needs.
• Eliminates the Housing Opportunities for Persons with AIDS (HOPWA) program, which provides grant funding to local governments to serve individuals living with HIV/AIDS, as well as their families.
• Eliminates the Pathways to Removing Obstacles (PRO) Housing grant program, which provides competitive grants to local governments to identify and eliminate structural barriers to affordable housing development.
• Reduces funding for fair housing activities, including anti-discrimination training and translation services. 

• Increases funding for addressing veterans' homelessness at the U.S. Department of Veterans Affairs (VA) by 16 percent to $3.8 billion, and includes $500 million to build facilities and $30 million to augment services at the West Los Angeles VA Medical Center.
• Establishes the Warrior Independence and Self-Sufficiency Ethos (WISE) Office to evaluate all VA homelessness programs and improve outcomes, test pilots and drive results to end veterans homelessness.
• Increases funding for suicide prevention outreach efforts at the VA by 1.8 percent to $727 million to help the VA and partner county agencies effectively reach veterans at-risk.
• Requests full funding for implementation of Section 302 of the Elizabeth Dole Act, which would provide outreach and funding support to County Veteran Service Offices on a competitive basis.
• Increases funding for Electronic Health Record Modernization (EHRM) implementation by 24.7 percent to $4.2 billion, with a dedicated timeline for modernization complete at all VA Medical Centers by 2031, improving ease of access to records for health care providers in VA facilities.
• Proposes $55 billion in funding to the VA for the Cost of War Toxic Exposure Fund (TEF) for FY 2027, and advance appropriations of $54 billion for TEF for FY 2028..
• Increases spending on medical care at the VA by 6.6 percent or $11.1 billion, including base discretionary funding, TEF, PACT section 707 medical facilities funds and medical collections, as well as carries out the work of the Community Care Network (CCN) NextGen initiative 

• Cuts funding for the Clean and Drinking Water State Revolving Loan Funds (SRFs) by $2.5 billion which would limit counties’ ability to maintain and improve water infrastructure without raising rates for residents. This is a much larger cut as the additional $43 billion appropriated for the SRFs from the Bipartisan Infrastructure Law will expire at the end of this fiscal year.  
• Water Infrastructure Finance and Innovation Act (WIFIA) program by $64 million, which would impact counties' ability to finance larger water system infrastructure upgrades of $20 million or above.  
• Eliminates the U.S. Department of Energy's Weatherization Assistance Program, which helps low-income households reduce energy costs and increase the energy efficiency of their homes.
• Reduces funding for the U.S. Environmental Protection Agency's (EPA) Brownfields program by $18 million. The Brownfields program already receives more applications than it can fund, and any reductions in funding limit counties' ability to clean up and redevelop contaminated parcels of land to create new economic development opportunities for residents.
• Reduces funding of the U.S. Army Corps of Engineers by $3.74 billion, which would limit the assistance provided by the Army Corps to protect, maintain and develop water infrastructure systems while advancing county interests related to ports, inland waterways, levees, dams, wetlands, watersheds and coastal restoration. 

• Eliminates $45 million in election security grants made available via Help America Vote Act (HAVA).
• Reduces U.S. Election Assistance Commission Salaries and Expenses by $7 million for a total of $74 million.  
• Increases total Census Bureau funding by 30 percent to $2.03 billion, driven almost entirely by decennial census activities.
• Increases periodic censuses and programs by $551 million significantly ramping up investment in 2030 Census preparation, testing and infrastructure.
• Cuts Census Bureau surveys and programs by $29 million which reduces support for ongoing surveys like the American Community Survey and other programs used for small area data that may impact federal funding formulas and housing and infrastructure planning allocations.
• Provides approximately $3.3 billion for the Bureau of Indian Affairs (BIA) supporting tribal public safety, social services, natural resource management and self-governance programs, with continued emphasis on law enforcement and justice functions in tribal communities.
• Allocates $30 million for a newly established National Fraud Division in the U.S. Department of Justice (DOJ), including $20.4 million for personnel and $9.6 million for technical capabilities. This is consistent with various efforts highlighting the administration's efforts to recoup federal dollars through rulemaking embedding policy compliance in contracts, subcontracts, and new aggregated data systems with the DOJ across federal agencies.  
• Provides approximately $1.52 trillion for the U.S. Department of the Treasury, driven largely by mandatory spending and interest costs, while core governance agencies remain comparatively small, including $8.8 billion for the legislative branch and $10.8 billion for the judicial branch.  
• Eliminates at least $176 million in identified funding and terminates multiple programs tied to diversity, equity and inclusion activities, including the Agency for Healthcare Research and Quality, Teacher Quality Partnerships, Community Development Financial Institutions Fund, Community Services Block Grants, Equity Assistance Centers, Minority Business Development Agency, Minority Serving Institutions programs, Fund for the Improvement of Postsecondary Education, Environmental Protection Agency environmental justice programs and DOJ equity and access to justice offices.
• The budget treats the tax exemption for municipal bond interest as a tax expenditure, estimated at $40.7 billion in FY 2027 and $432.5 billion over ten years, framing it as lost federal revenue.  
• County Context: Municipal bonds are the primary financing tool for county infrastructure, and their tax exempt status significantly lowers borrowing costs with NACo’s estimates showing that eliminating the exemption could increase borrowing costs for local governments by over $823 billion over a decade and result in an additional $5,364 imposed on 153 million American taxpayers and $6,554 on 125 million American households. By continuing to characterize municipal bonds as a federal subsidy in the context of persistent deficits, the budget reinforces legislative pressure to target this financing tool for deficit reduction, shifting substantial costs from the federal government to counties and local taxpayers.
• Reduces nondefense discretionary spending by approximately 10 percent, placing significant downward pressure on federal grant programs that support counties, including formula and block grants across housing, justice, workforce and social services programs, while also eliminating certain targeted grants such as election security funding and shifting others toward consolidated, state-administered structures.

• Reduces the U.S. Department of Health and Human Services budget by 12.5 percent from $127 billion enacted in FY 2025 to $111.1 billion.
• Again proposes to implement major agency reorganization by consolidating its 28 operating divisions into 15, with the newly formed Administration for a Healthy America (AHA) absorbing several agencies like the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Centers for Disease Control and Prevention (CDC) and the Office of the Assistant Secretary for Health (OASH). AHA would oversee programs such as the 988 Suicide and Crisis Lifeline, rural opioid response and maternal and child health services previously managed by these agencies. While there’s no direct impact of the consolidation on counties, the reorganization may create operational challenges related to these programs due to changes in guidance, reporting requirement and potential disruptions in technical assistance that was being provided by the eliminated federal entities.
• Consolidates major behavioral health funding streams by merging the Substance Use Prevention, Treatment and Recovery Block Grant (SUBG) and the Community Mental Health Services Block Grant (MHBG) into a single $4.14 billion Behavioral Health Innovation Block Grant, while also establishing an $80 million Behavioral Health and Substance Use Disorder Resources for Native American grant program. Merging the SUBG and MHBG into a single block grant would give states more flexibility but risks reducing dedicated, predictable funding for county behavioral health systems.
• Increases funding for telehealth programs, providing approximately $70 million for telehealth initiatives in FY 2027, up from about $46 million in FY 2026. This investment is paired with a proposed $15 million increase for the Office of the Chief Innovation Officer, signaling the administration's focus on advancing technology in healthcare delivery.
• Reduces overall funding for Health Centers, proposing approximately $3 billion for Health Centers (including $1.8 billion in discretionary funding), representing a net decrease of about $3.5 billion compared to FY 2026 levels, largely driven by reductions in mandatory funding.
• Increases funding for CMS program integrity initiatives to $2.7 billion, representing an increase of about $80 million over FY 2026 levels, reinforcing the administration's focus on detecting and preventing fraud, waste and abuse in Medicare and Medicaid.
• Reduces funding for the National Health Service Corps, a critical health workforce program, by $267 million — representing a decrease of more than 55 percent. 

• Eliminates the Low-Income Home Energy Assistance Program (LIHEAP), which provides energy cost and weatherization assistance to low-income households.
• Eliminates the Community Services Block Grant (CSBG), which supports anti-poverty programs tailored to an individual community's needs, with a focus on housing, health, employment, income and civic engagement outcomes.
  • County context: Most CSBG funding is distributed to states, which must pass at least 90 percent of funds to a network of nearly 1,000 Community Action Agencies (CAAs) in 99 percent of America’s counties. (CSBG) represents a unique and effective partnership with counties, states, the federal government and community organizations.
• Consolidates 17 federal education grants into one federal grant program, but decreases the net funding by $4.5 billion, or 69 percent.
• Maintains funding for the Special Supplemental Nutrition program for Women, Infants and Children (WIC), but includes a reduction in the program's vouchers for fresh fruits and vegetables.
• Proposes $30 million for housing for youth aging out of foster care, an increase from $5 million in FY 2026.
• Maintains level funding for child welfare services, the Social Services Block Grant (SSBG) and the Temporary Assistance for Needy Families (TANF) program.

• Cuts $1.5 billion to FEMA non-disaster grant programs, which could leave counties unable to prepare for large-scale events or combat potential acts of terrorism.
• Provides an additional $3 billion to the U.S. Department of Justice (DOJ) for programs to combat violent crime.
• Cuts $1.7 billion to state and local grant programs at DOJ, including eliminating almost 30 grant programs.
  • County context: Counties operate over 90% of local jails nationwide and serve as frontline providers of justice and behavioral health services; cuts to DOJ grant programs risk undermining counties’ ability to manage jail populations – where large shares of individuals have mental health or substance use needs – and to fund diversion, treatment and reentry programs that improve public safety outcomes.
• Invests almost $30 billion in Customs and Border Protection and Immigration and Customs Enforcement programs.
• Invests an additional $360 million in Drug Enforcement Administration (DEA) programs, including for the hiring of an additional 300 DEA agents. 

• Fully funds payments in lieu of taxes (PILT) at an estimated $635 million.
• Proposes to unify all federal wildland firefighting assets under the U.S. Wildland Fire Service within the U.S. Department of the Interior.
• Moves endangered species management and permitting under the Marine Mammal Protection Act from the U.S. Department of Commerce to the U.S. Fish and Wildlife Service in the Department of the Interior.
• Implements a surcharge on international visitors to National Park Service (NPS) sites to address the agency's deferred maintenance backlog.
• Cuts funding for the National Park Service (NPS) by 36 percent, including a reduction of more than $700 million for park operations and staffing reductions of nearly 3,000 NPS employees.
• Reauthorizes the Legacy Restoration Fund, which can be used to address deferred maintenance or to expand federal landholdings.
• Prioritizes the use of the Land and Water Conservation Fund to acquire conservation easements on non-federal land rather than acquisitions to the federal estate.
• Reduces staffing levels at the Bureau of Land Management (BLM) by nearly 2,000 employees. 

• Eliminates all funding for the National Telecommunication and Information Administration's (NTIA) Digital Equity Act programs, which were enacted under the Infrastructure Investment and Jobs Act (IIJA) and provide grant and subgrant opportunities to counties to support local digital literacy and broadband adoption initiatives.
  • County context: The proposed cuts come as the NTIA continues implementation of the Broadband Equity Access and Deployment (BEAD) program. Under the BEAD program, states are currently receiving final approval to fund identified projects for broadband infrastructure buildout to unserved and underserved areas in counties. Counties are awaiting guidance on the use of remaining BEAD funds for non-deployment.  
• Increases funding for cybersecurity state coordinators under the Cybersecurity Infrastructure and Security Agency (CISA), which provides federally assigned, state-based personnel to assist in strengthening local defenses.
• Increases funding for development of a National Risk Register under CISA, which will work to identify risk to national infrastructure and systems and develop select risk scenarios and assessments in consultation with state and local government stakeholders alongside other critical infrastructure sectors.
• Provides no new funding for implementation of Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) regulations under CISA. CIRCIA is a requirement by Congress for CISA to create and implement a cyber incident reporting system for counties and other critical infrastructure sectors to report cyber incidents and threats.  
  • County context: Counties support the goals of CIRCIA but have sought clarity in the rulemaking process. In February 2026, CISA announced they would hold town halls with counties and other stakeholders to discuss the ongoing implementation of CIRCIA. The town halls are currently paused due to the lapse in funding for the U.S. Department of Homeland Security (DHS).
• Eliminates all federal funding for the Election Security Program under CISA, which provides local officials with guidance on maintaining cybersecurity in election systems and previously provided contract support for the Election Infrastructure Information Sharing Analysis Center (EI-ISAC).
• Maintains rural broadband funding levels at the U.S. Department of Agriculture (USDA) Rural Development for the Distance Learning and Telemedicine Grant Program and the Telecommunications Loan Program, while eliminating the remaining $40 million in carry-over balance for the Rural eConnectivity Program (ReConnect Program).  

FY 2027 will be the first fiscal year after the expiration of the Infrastructure Investment and Jobs Act (IIJA; PL 117-58). Passed in 2021, the IIJA both provided five-year authorization for transportation programs and appropriated funding in advance for many key programs. These advance appropriations meant that the annual appropriations from Congress for a program each year only constituted a portion of the funding available for said program.

With these advance appropriations set to expire at the end of FY 2026, many transportation programs will see a cut in FY 2027 unless annual appropriations numbers increase commensurate with the amount that had been appropriated in advance. In other words, an annual appropriation in FY 2027 that is the same as it was in FY 2026 may constitute an overall cut, due to the lack of advance appropriations. 

• Reduces funding for the Capital Investment Grants (CIG) program through the Federal Transit Administration (FTA) by advancing fewer projects than in prior years.
• Eliminates the National Infrastructure Investments program, commonly referred to as the Better Utilizing Investments to Leverage Development (BUILD) grant program. This is a popular, flexible grant program that many counties have used to fund multimodal transportation projects.
• Cancels over $4 billion in unobligated balances from several programs focused on building out electric vehicle charging infrastructure, including the Charging & Fueling Infrastructure Grants (CFI) program and the National Electric Vehicle Infrastructure (NEVI) program.
• Increases discretionary funding for the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program from $137 million in FY 2026 to $300 million in FY 2027.
• Drastically reduces Essential Air Service (EAS) spending by restricting program eligibility, jeopardizing critical air transportation access and mobility in small and isolated communities.
• Requires "small airports" to enroll in a program that substitutes private screeners for Transportation Security Administration (TSA) officials.
• Increases the obligation limitation from the Highway Trust Fund for highways and public transit to $85 billion in FY 2027, up from $83.3 billion in FY 2026.
• Does not continue funding from several programs that were stood up and funded under the IIJA including:  
  • The Airport Infrastructure Grants (AIG) program
  • The Airport Terminal Program (ATP)
  • The Safe Streets and Roads for All (SS4A) grant program
  • The Strengthening Mobility and Revolutionizing Transportation (SMART) grant program