In November 2025, Congress passed a continuing resolution to fund the federal government through January 30, 2026. The date has arrived, and you may be asking, what happens now? Throughout Fall 2025, during the longest federal shutdown in history, NLC remained a steadfast advocate and educational resource for municipalities, and we are committed to continuing to do so. Keep reading for a quick breakdown of the Congressional vote and what local governments need to know.
General Overview
Each year, Congress must decide how the federal government spends money through the appropriations process. For fiscal year (FY) 2026, which runs October 1, 2025 – September 30, 2026, Congress must pass 12 spending bills (formally called 12 appropriations bills) that fund almost all discretionary spending across various government agencies. Each bill is handled by a subcommittee of the House and Senate appropriations committees. When these bills are not passed by October 1 of each year, the country faces two options: a government shutdown or the passage of a Continuing Resolution, which maintains spending levels from the previous year.
Where Things Stand Now
As the January 30 midnight deadline approached, President Trump and Senate Democrats on January 29 reached an agreement to fund the federal government, avoiding a partial shutdown.
Under the Trump-endorsed agreement, the Senate planned to vote on a “minibus” package comprising five full-year funding bills, along with a short-term stopgap measure to fund the Department of Homeland Security (DHS) for two weeks. However, even if the Senate passes the deal on January 30, a partial government shutdown could still occur, as the House is currently in recess and not scheduled to return until Monday. Once back in session, the House must pass the legislation before it can be sent to the president’s desk. Agencies subject to the partial shutdown include the Departments of Housing, Transportation, Labor, Health and Human Services, Education, Treasury, State, non-essential Defense operations and Homeland Security.
What a Partial Shutdown Could Mean for Local Governments
We know that even a partial shutdown can delay federal funding systems that local governments heavily depend on, particularly for programs tied to DHS, transportation, housing and public safety. A lapse in DHS funding can affect immigration services, disaster preparedness, and emergency management coordination — each of which relies on federal staffing. In dealing with the uncertainty of stopgap funding, local governments’ best strategy is to prepare for potential short-term disruptions, protect essential services and closely monitor federal updates.
How to Navigate a Government Shutdown
Our fact sheet helps cities, towns and villages mitigate the local economic impact of a federal shutdown while also protecting low-income and vulnerable residents.
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