New from the Pew Foundation: What Waning Federal Disaster Aid Would Mean for State Budgets. Shifts in response and recovery responsibilities could pose fiscal challenges

“States play a critical and often overlooked role in paying for disaster costs, assisting communities and individuals and helping to cover cost shares required by federal relief programs. To cover these myriad costs, states draw from a range of funding sources, including dedicated disaster or emergency accounts, rainy day savings, and general fund revenue.

However, tapping these resources for an emergency can also mean directing funds away from other priorities, and policymakers increasingly face overlapping challenges related to paying for disasters. Not only are extreme weather events growing more frequent and expensive, but federal policymakers also are exploring ways to reduce the federal role in disasters and state budgets are tightening as pandemic-era surpluses disappear. Together, these shifts are prompting states to reconsider how they fund their efforts before, during, and after a disaster, collectively called “disaster assistance.”