Federal Funding Changes Impacts to Counties

The recently enacted legislation, H.R. 1, also known as the One Big Beautiful Bill Act, and President Trump’s Fiscal Year (FY) 2026 budget request signal significant changes to the federal, state and local government partnership. While counties collaborate with federal and state partners to deliver essential services, several changes — aimed at reducing federal costs — will shift financial and administrative costs onto subnational levels of government. In a complex intergovernmental structure, these subnational governments, including counties, could see a downstream effect approaching $1 trillion over ten years.1This removal of longstanding federal funding sources and federal cost shift represents a fundamental swing in the intergovernmental partnership, potentially pushing counties to choose between cutting services or raising local taxes.