The Pew Charitable Trusts helps state policymakers prepare for new and emerging risks to fiscal stability and manage uncertainty by strengthening budgeting practices across several areas, including:
- Understanding and improving natural disaster budgeting practices.
- Identifying and planning for other emerging risks such as significant demographic, technological, and economic shifts.
- Improving state management of federal funds to account for uncertain and volatile funding.
The share of states’ total revenue coming from federal funds remained elevated in fiscal year 2022, fueled by pandemic aid dollars and infrastructure investments. Total federal grants to states topped $1 trillion for the first time, but amid soaring state tax collections, their share of state budgets declined slightly from a record high in fiscal 2021.
Extreme weather impacts are felt at the local level first, something 3,143 county governments throughout the United States know all too well. According to the National Association of Counties (NACo), in 2023 alone, more than 25% of counties experienced a federally declared major disaster, events that ran the gamut from wildfires and floods to drought and tornadoes.
The American Rescue Plan Act (ARPA) passed by Congress in 2021 provided a historic influx of federal funding to help the nation respond to the dual economic and public health crises that accompanied the COVID-19 pandemic.
Wildfires in the United States have become more catastrophic and expensive in recent years, with the U.S. Department of the Interior and the U.S. Forest Service nearly doubling their combined spending on wildfire management in the last decade. Wildfire management consists of preparing for, fighting, recovering from, and reducing the risk of fires. To execute these activities, states, localities, the federal government, and Tribes, as well as nongovernment entities such as nonprofit organizations and private property owners, participate in a complex system of responsibilities and funding dictated by land ownership and an interconnected set of cooperative agreements.
The share of states’ total revenue that comes from federal funds climbed to a record high nationally and in most states in fiscal year 2021, the first full budget year bolstered by temporary COVID-19 pandemic aid from the federal government.
