Stalled FEMA funds put pressure on state to fund emergency management

Federal funding for North Carolina disaster response and mitigation has dwindled in recent years and millions of dollars previously approved by U.S. officials still haven’t materialized — a scenario that could put pressure on the state to pay for staffing and equipment to defend against or respond to natural disasters or terrorist threats. 

That’s according to a new report by the legislature’s Fiscal Research Division ahead of a Thursday legislative oversight committee meeting. 

“We've got to be able to have the means and the resources to operate in the field without delays,” said state Fire Marshal Brian Taylor told the Joint Legislative Oversight Committee on Emergency Management. “We have to think outside the box now.” 

Taylor and other fire officials described funding challenges that arose during response to Hurricane Helene and in the months since the September storm that killed more than 100 people and caused about $60 billion in damage in the state. 

Less than half of the state Division of Emergency Management’s $57 million budget comes from the state government, and the vast majority of its 438 positions are funded in part by federal grants. 

But the state has received fewer federal dollars from those programs in recent years, fiscal researchers report, which means less money is flowing to counties: 

• During the last fiscal year, the state received about $8.5 million from the federal Emergency Management Performance Grant. That’s down about 20% from the annual average over the previous three fiscal years. Much of that money passed along to counties funds local emergency management personnel. 

• The state received about $8 million under the State Homeland Security Program and the related Urban Area Security Initiative during the last fiscal year. That’s down about 10% from the annual average over the previous three years. The grants are used to fund counterterrorism measures. 

“Coupled with inflation, this has reduced the purchasing power of these grants and led to [the Division of Emergency Management] to retain a larger portion of the funds at the state level,” the report said. Of those three grants combined, about 56% of the money was distributed to counties in the last fiscal year, down from about 64% over the previous three years, according to data provided by the Fiscal Research Division.

Meanwhile, the state Division of Emergency Management hasn’t received any grant dollars from those programs for the current fiscal year. The Federal Emergency Management Agency made additional requirements and parameters for those grants, leading to an ongoing lawsuit between 11 states and FEMA. The federal agency hadn’t released the funding as of March 2, fiscal researchers said. 

Most emergency and disaster-response employees are employed by local public safety agencies, such as local fire or police departments. But state emergency management personnel provide assistance during major disasters. The state also provides training and equipment to local emergency management personnel. 

While the state Division of Emergency Management doesn’t directly operate local emergency agencies in the state, it plays “a vital role in ensuring that North Carolina is well prepared and organized to respond to emergency situations and disasters,” the report said. 

A state emergency management spokesperson didn't immediately respond to a request for comment, nor did a FEMA spokesperson. 

FEMA delays

Delays in FEMA funding have presented challenges to other divisions dealing with state disasters. President Donald Trump has pushed to slash federal spending, including on emergency response, to help pay for new tax cuts. North Carolina has sued the Trump administration over some of those cuts, and won, but in some cases the funding still hasn’t materialized.

Billions of dollars in federal disaster aid for Hurricane Helene also remain uncertain for the state following Trump’s dismissal of Homeland Security Secretary Kristi Noem. Noem had faced bipartisan criticism over her handling of FEMA operations tied to the storm. 

Noem had demanded all FEMA funding for Helene go through her office as part of an effort to reduce federal spending. She had faced criticism from North Carolina’s Democratic governor, Josh Stein, and the state’s Republican U.S. senators for that approval policy and the low level of federal aid delivered to North Carolina. 

The lack of Helene funding has meant that county governments in western North Carolina have found themselves on the hook for millions they paid to clean up and rebuild in the aftermath of the storm, expecting that the federal government would reimburse them.

The new report state lawmakers plan to debate Thursday, however, deals with other non-Helene fallout of the federal government’s decision to pull back emergency funding for states. It highlights millions of dollars for counter-terrorism and disaster preparedness work that have dried up — a factor that could now force state lawmakers to decide whether to abandon those priorities or find money somewhere else in the state budget to keep them going.

It comes as state lawmakers have so far failed to pass a new state budget, and as they face a looming budget deficit — which their fiscal researchers say is due to planned income tax cuts that could soon force the state to choose between reversing some of those cuts, or slashing state spending by billions of dollars.

At the same time, state lawmakers are also having to factor in whether they will plug additional holes in the state budget caused by Trump’s cuts to federal programs that previously helped North Carolina pay for health care, school lunches, food stamps and more.