Great! FEMA increased the federal cost share. Learn how that could impact your planned resilient infrastructure projects

FEMA Administrator Deanne Criswell recently announced the federal cost share for FEMA’s Public Assistance (PA), Hazard Mitigation Grant Program (HMGP), and even some Individual Assistance (IA) programs will increase from 75% to 90% for recent disasters. This announcement comes as President Biden signed “H.R. 2471, Consolidated Appropriations Act, 2022” which, amongst other actions, increases FEMA’s federal cost share of all emergency and major disaster declarations between January 1, 2020, and December 31, 2021. This federal funding increase is in addition to the president’s recent extension of COVID-19 pandemic funding, which Plexos’ Bill Doran wrote about in his recent Blog post.

This federal funding increase will likely be welcome news to state, local, territorial, and tribal (SLTT) governments impacted by the 315 disasters declarations made throughout 2020 and 2021. Here are just a few ways this adjustment may help:

• By lowering the non-federal cost share to poor and impoverished communities, this may help FEMA meet Goal #1 of their 2022-2026 Strategic Plan, “Instill Equity as a foundation of emergency management.”
• Governments often utilize other federal funding (HUD CDBG-DR funding, for example) to cover their non-federal cost share requirement, typically referred to as a “match” program. These governments may now choose to reallocate this funding–often more flexible than FEMA funding–to support initiatives like economic development, infrastructure, or housing.

However, this retroactive adjustment may also have significant consequences for a community’s ability to prepare for future disasters. For example:

• This adjustment may actually reduce the number and scale of mitigation and resilience projects across the country, contrary to FEMA’s Goal #2 and Goal #3 of their Strategic Plan. For example, in August 2021, President Biden and FEMA announced a “Historic $3.46B in Hazard Mitigation Funds to Reduce Effects of Climate Change”. As figure 1 below illustrates, of this $3.46B, approximately $2.9B was allocated for the 75% federal cost share for HMGP projects. This would equate to ~$3.9B of mitigation projects across the country. Now, at 90% federal cost share, this same $2.9B will only fund ~$3.2B of resiliency projects across the country – a reduction of more than $700 million dollars in resilient infrastructure projects for a single incident (and there were over 250 non-COVID declarations in 2020 and 2021)!

Figure 1:

• As figure 2 below illustrates, the increase in federal cost share without an increase in HMGP funding may actually result in less fully funded projects. This is especially evident when the cost share adjustment is applied retroactively - after project selection and allocations have already been made, as is the case here. In this hypothetical example of 10 projects each having a total cost of $1M, the federal cost share increase results in 2 of the 10 projects no longer having full funding – a 20% reduction in FEMA funded resilient infrastructure projects.

Figure 2:

Much good will come as a result of this increase in federal cost share funding. Plexos continues to monitor any increase in FEMA mitigation funds to achieve these goals as well as any changes to policy that could help streamline the process.

Plexos Group supports SLTT governments across the country in managing FEMA PA, HUD CDBG-DR, HMGP, and other funding programs as well as implementing large-scale, complex infrastructure projects made possible through public and private funding.

Contact Us to learn more about how we can help your organization maximize federal funding programs, limit risk, maintain compliance with federal laws, and leverage Projexis™ technology to expedite your next project.