The Trump administration is quickly restructuring the Federal Emergency Management Agency (FEMA) in a way that has a major impact on state and local governments.
“We’re going to give you less money. We’re going to give it straight to you. It’s from the president’s office,” President Donald Trump said at a June 11 press conference.
The agency is responsible for coordinating the response and recovery of disasters ranging from floods to wildfires and terrorist attacks.
The agency reported a total budget authority of $60 billion in 2025. Federal spending on disaster relief often draws supplementary spending from Congress.
FEMA critics say agents are slow to pay victims and are slow to provide guidance to the community in the process of rebuilding.
“We’ve been working on streamlining their recovery programs for years and recommending that they better coordinate their programs and that the community and survivors do not have to navigate multiple federal bureaucratic programs. And honestly, they couldn’t do that.”
According to a government accountability agency report issued in March, FEMA currently manages more than 600 open disaster declarations. According to FEMA, the spending includes $80 million in 2025 for recovery from Hurricanes Katrina, Rita and Wilma, which devastated the giant strips of the Gulf in 2005.
Cutting federal funds for disaster relief will put a burden on state and local governments in areas affected by the disaster.
According to the Western North Carolina Recovery Office, when Hurricane Helen hit the US in late September 2024, it caused $59.6 billion in damage in North Carolina. As of May 2025, the federal government had provided roughly $3.7 billion in recovery funds, according to the office of Democratic Gov. Josh Stein.
A spokesman for FEMA in a statement to CNBC said in a statement to CNBC that “FEMA principles for emergency management argue that disasters are best managed when federally supported, state-controlled and executed locally.”
Much work remains after Helene damaged many parts of western North Carolina. More than 73,000 homes were damaged, according to an April report from Rep. RN.C. Chuck Edwards. Major roads, including I-40 stretches, are also damaged, and the state needs additional federal funds to cover the cost of repairing the road, Edwards’ report said.
The average revenue in disaster areas ranges from $35,809 to $55,607, depending on the county, according to the Edwards report.
“Not having FEMA means that local governments have to deal with disasters right now, and that’s always greater than local government revenue,” said Sara Wells Roland, founder and owner of Village Potter’s Clay Center in Asheville, North Carolina. “I think it’s a huge disaster to be taken away from funds.”
Wells Roland said her business had been operating in Asheville’s River Arts District for 13 years before Hurricane Helen passed through town. According to NOAA, the business was destroyed by floods of more than 24 feet. According to Wells Rolland, Village Potters Clay Center, which generated approximately $743,000 per year in 2023, recorded equipment loss of about $200,000.
Wells Rolland said the business is covered by flood insurance through FEMA’s national flood insurance and received a $165,000 payment. She is scheduled to reopen this fall at a new highlands.
“We are the economic drivers of tourism, hospitality, restaurants and local development. We are an important part of the economic community because you know,” said Jeffrey Burrows, president of the River Arts District Association. “If we can’t undertake another loan, how do we get the funds to help us maintain our presence so that we can stay open?”
Watch the video above to see how FEMA evolves over the next few years.
