FEMA wants states to shoulder more disaster costs. Can they afford it?

The Trump administration is pushing states to assume greater responsibility for disaster response and recovery costs, proposing to reduce FEMA's federal cost-sharing from 75% to 50% under its Public Assistance program. The shift comes as FEMA denies some assistance requests, including one following July flooding in Texas that left a family unable to rebuild their home without insurance. FEMA argues state and local officials are better positioned to lead recovery efforts, though some states question whether they can afford a reduced federal role.

A Trump-appointed FEMA Review Council has proposed the cost-sharing changes, which could require congressional approval and would significantly increase expenses for state and local governments on major disasters. The administration separately announced $400 million in federal funding for flood prevention projects. Between January 2020 and May 2026, the federal government approved or obligated approximately $42.9 billion in disaster assistance, with five states—Florida, Louisiana, North Carolina, Texas and California—accounting for more than half.