As NLC heads into a new year, it is important to reflect on the significant progress we made together — and prepare for the challenges and opportunities that lie ahead. This past year tested local governments with unprecedented federal uncertainty, including a prolonged shutdown and shifting budget priorities. Through strong advocacy and partnership, NLC delivered critical wins that safeguarded essential programs and positioned cities, towns and villages for success.
Building On Major Advocacy Wins in 2025
Protecting Communities During the Federal Shutdown
The 43-day shutdown threatened vital services and local budgets. NLC worked aggressively to restore and maintain funding for programs that matter most to local governments in meeting their residents’ needs:
- Supplemental Nutrition Assistance Program (SNAP) benefits extended through September 2026.
- Low Income Energy Assistance Program (LIHEAP) funds released ahead of the winter season.
- U.S. Department of Housing and Urban Development (HUD) housing vouchers fully funded to prevent displacement.
- Federal Emergency Management Agency (FEMA) disaster relief and flood insurance maintained at FY 2025 levels.
- Small Business Administration loans expedited to support local economies.
Cybersecurity and Public Safety Investments
NLC advocated for the reauthorization of the State and Local Cybersecurity Grant Program through January 2026, reinforcing municipal cyber resilience. We also supported FEMA’s launch of a Counter-UAS Grant Program, giving local governments new tools to address emerging security threats.
Infrastructure and Water Funding Commitments
NLC advanced federal engagement on long-term water infrastructure and transportation priorities, laying the foundation for future investments in clean water, broadband and climate resilience.
Guidance on Compliance and Fiscal Management
To support local leaders, NLC provided timely guidance on implementing the overtime tax deduction and preparing for American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) closeout, ensuring compliance and fiscal stability.
The Federal Funding Climate in 2026
The outlook for 2026 is shaped by several critical factors:
- January Appropriations Deadline: Congress must finalize FY 2026 appropriations by the end of January to avoid another shutdown. Continuing resolutions remain a risk, creating uncertainty for local planning.
- Funding Level Shifts to Core Programs: Despite the President’s FY2026 budget proposal that recommended eliminating funding for several programs Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) programs, Congress is likely to maintain level or reduced funding for FY 2026. NLC is leading efforts to preserve level funding for these programs, essential for community development and neighborhood revitalization, in addition to advocating for programs that improve housing attainability.
- Infrastructure and Resilience: While federal partners signal interest in water and transportation investments, funding levels will depend on early negotiations for surface transportation and water infrastructure reauthorizations.
- Cybersecurity and Public Safety: Reauthorization of cybersecurity grants and expansion of security programs will be top priorities as digital threats grow.
What Local Leaders Can Do to Kick Off 2026
- Engage Early on Appropriations: The January deadline is critical. Local leaders should advocate for full-year appropriations to prevent disruptions in housing, infrastructure and public safety programs.
- Champion Infrastructure and Cybersecurity Investments: Federal partners are signaling opportunities for water, transportation and digital security funding. Local leaders should position their communities to benefit from these programs.
Your Role in Shaping Federal Policy
Our success depends on strong local voices. Here’s how you can engage:
- Join us at the Congressional City Conference and Hill Day: This year’s conference will be March 16-18, 2026, in Washington, D.C. Meet with members of Congress and advocate for your community’s priorities.
- Take Action Through NLC’s Advocacy Center: Participate in regular campaigns to influence federal decisions. Visit the Advocacy Center to send messages to Congress and amplify local priorities.
2025 demonstrated the impact of coordinated advocacy. In 2026, we must continue to lead — ensuring federal policies and funding strengthen local governments and the communities they serve.
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