The FY2027 Budget Proposes Eliminating $13 Billion in Grants That Cities and Counties Depend On — From Clean Water to Public Safety

When the White House released its FY2027 budget request on April 3, the initial coverage focused on the most dramatic numbers: a 55 percent proposed cut to NSF, the elimination of HHS grant programs worth $15.8 billion, and the zeroing out of every major HUD housing program. Those stories matter. But they have overshadowed a parallel assault on the federal grant programs that fund the operational capacity of American cities and counties — the clean water systems, public safety equipment, disaster preparedness, broadband infrastructure, economic development offices, and transportation projects that residents interact with every day without knowing federal dollars paid for them.

The National League of Cities warned on April 10 that the budget proposes a "10% reduction in non-defense spending" financed by a $445 billion increase in defense, with the domestic cuts falling disproportionately on programs that flow directly to local government. The National Association of Counties identified program eliminations and cuts across HUD, DOJ, EPA, FEMA, NTIA, EDA, DOT, USDA, and the Interior Department — touching virtually every federal dollar that reaches a city hall or county courthouse.

Here is the damage report, agency by agency, for the programs that keep local government operating.

Department of Justice: $1.7 Billion in State and Local Grants at Risk

The DOJ budget requests a record $40.8 billion in discretionary authority — a $4.7 billion increase from FY2026. Nearly all of that increase goes to immigration enforcement, border security, and federal prosecution capacity. What local governments lose is the grant portfolio that has funded community policing, body cameras, forensic labs, violence intervention programs, and victim services for decades.

The budget proposes eliminating or deeply cutting state and local grant programs totaling approximately $1.7 billion. The Targeted Violence and Terrorism Prevention Grant program, Byrne Justice Assistance Grants, COPS Hiring Program grants, and Violence Against Women Act grants all face reductions. For police departments that used federal grants to purchase body-worn cameras, hire community liaison officers, or stand up crisis intervention teams, the message is unambiguous: those programs are now your problem.

The one new initiative is a $100 million Model Cities program that would fund "unified strategic approaches between federal, state, local, and tribal leaders" on public safety. At $100 million, it replaces roughly six cents of every dollar being cut from existing local law enforcement grants.

EPA: Clean Water at Its Lowest Funding Since Reagan

The FY2027 budget proposes cutting EPA by 52 percent — from approximately $8.82 billion to $4.2 billion, the agency's lowest funding level since the 1980s. For local governments, the cuts that matter most are the State Revolving Funds.

The Clean Water and Drinking Water State Revolving Funds — the financing backbone for municipal water and wastewater infrastructure across the country — face $2.5 billion in proposed cuts. These are not obscure programs. The SRFs are how cities replace aging water mains, how rural communities build their first wastewater treatment plants, how coastal municipalities upgrade stormwater systems to handle intensifying rainfall. When Granted previously reported on the FY2026 EPA cuts, the SRFs had already been slashed by roughly 90 percent from FY2025 levels. The FY2027 proposal would cut them further still.

Beyond the SRFs, the budget would eliminate over $1 billion in categorical grant programs that help states implement and enforce the Clean Air Act and Clean Water Act. Environmental justice programs would be fully zeroed out. The atmospheric protection program — formerly the climate protection program — would be eliminated. For any municipality that has relied on EPA grants to fund lead service line replacement, brownfield remediation, air quality monitoring, or Superfund cleanup, the federal partner is proposing to leave the table.

FEMA: Non-Disaster Grants Cut by $1.5 Billion

FEMA's total budget includes a proposed $1.3 billion reduction in non-disaster grant programs. This includes the elimination of the Targeted Violence and Terrorism Prevention program, the Shelter and Services Program, and the National Domestic Preparedness Consortium.

The budget also eliminates the Assistance to Firefighters Grants (AFG) and Staffing for Adequate Fire and Emergency Response (SAFER) programs — which together provide hundreds of millions annually to local fire departments for equipment, training, and personnel — and proposes converting them to a consolidated formula-based approach with reduced funding.

For cities and counties in high-risk disaster zones, the picture is mixed. FEMA's Building Resilient Infrastructure and Communities (BRIC) program was restored by federal court order after the administration attempted to terminate it. As Granted has reported, the $1 billion program is currently accepting applications through July 23, 2026. But the FY2027 proposal signals that the administration considers hazard mitigation a state responsibility, not a federal one. Even programs that survive court challenges may face starvation in the next appropriations cycle.

Economic Development and Regional Planning: Zeroed Out

The Economic Development Administration faces complete elimination — a $449 million cut to zero. EDA has been the federal government's primary tool for economic development in distressed communities since 1965, funding everything from industrial parks to revolving loan funds to regional planning commissions. Congress has historically protected EDA from elimination proposals, but the consistent zeroing signals a philosophical position: economic development is a state and local responsibility.

The Appalachian Regional Commission faces a 40 percent funding cut, and all other regional commissions — Delta Regional Authority, Denali Commission, Northern Border Regional Commission — would lose federal support entirely. For the regional development organizations and planning commissions that depend on these programs, the loss extends beyond direct grants. Federal planning funds leverage private investment, coordinate multi-jurisdictional infrastructure, and provide the capacity that small rural communities cannot fund alone.

The USDA Rural Business Service ($82 million) and Community Facilities Grant Earmarks ($659 million) would also be eliminated, removing the two primary USDA mechanisms for rural infrastructure and business development.

Broadband, Transportation, and Everything Else

The budget reaches into nearly every corner of federal-local interaction:

NTIA Digital Equity Act programs: eliminated. The digital equity grants that were part of the Bipartisan Infrastructure Law's broadband buildout would be zeroed. For rural and underserved communities still waiting for broadband connectivity, the federal funding would disappear before deployment is complete.

RAISE/BUILD Transportation Grants: eliminated. The competitive discretionary transportation grants that funded locally designed projects — bike infrastructure, transit stations, bridge replacements, port improvements — would be zeroed. DOT would retain formula funding, but the competitive programs that allowed communities to compete for transformative infrastructure investments would cease.

Airport Infrastructure Grants: eliminated. Small and regional airports that depend on federal grants for terminal upgrades, runway rehabilitation, and safety improvements would lose their primary federal funding source.

Electric Vehicle Charging Infrastructure: $4 billion canceled. The Bipartisan Infrastructure Law's EV charging network buildout would be terminated.

Election Security Grants: eliminated. Federal support for states and localities to secure voting systems, replace aging equipment, and train election workers would end.

21st Century Community Learning Centers: eliminated. The after-school and summer learning program that served 1.5 million students in 2024 would be zeroed.

National Park Service: reduced 36 percent. Maintenance backlogs that already exceed $20 billion across the park system would grow further.

The Doctrine Behind the Cuts

These eliminations are not random. They reflect a consistent principle articulated throughout the budget document: the federal government should not be subsidizing functions that states, localities, and the private sector can perform.

In practice, this doctrine creates an asymmetry. Wealthy jurisdictions with strong tax bases, municipal bond capacity, and access to private capital markets can absorb the loss of federal grants by replacing them with local revenue or private financing. Rural communities, small cities, and economically distressed counties cannot. They do not have the bonding capacity to replace a Clean Water SRF loan. They cannot self-fund a forensic crime lab or a regional fire training academy. They lack the planning staff to coordinate multi-jurisdictional economic development without EDA-funded regional commissions.

The budget's implicit assumption is that these functions will continue without federal support. The more likely outcome is that they will atrophy, with the sharpest declines in the communities that have the fewest alternatives.

What City and County Grant Seekers Should Do Now

Track the appropriations process, not the budget request. The president's budget has never passed Congress as written. The House and Senate Appropriations subcommittees will draft their own funding bills in the coming weeks, and bipartisan coalitions have historically protected most of these programs. But "historically" is doing a lot of work in that sentence. Contact your appropriators now, before markups begin.

Quantify local dependency. NACo recommends that counties document exactly what federal grants fund in their jurisdictions: the number of water mains replaced, police officers hired, fires responded to with federally funded equipment, businesses supported through EDA revolving loans. Legislators respond to constituent-level impact data, not abstract program descriptions.

Assess which programs have Congressional champions. CDBG has survived elimination proposals six times. The SRFs have strong bipartisan support. The COPS program has historically been protected. Programs without specific Congressional advocates — like election security grants or digital equity — face higher risk.

Model contingency budgets. If your infrastructure plan, public safety expansion, or economic development project depends on any of the programs listed above, begin modeling a scenario where that federal contribution is reduced 25 to 50 percent. Identify alternative state programs, municipal bond mechanisms, or private sources that could partially replace the loss.

Coordinate across sectors. The FY2027 budget proposes cutting housing, public health, science, education, and local government infrastructure simultaneously. Cities that coordinate advocacy with housing authorities, health departments, school districts, and research institutions present a unified front that is harder for appropriators to ignore.

This budget will not pass Congress in its current form. But the negotiation between a $73 billion domestic cut proposal and a Congress that rejected most FY2026 cuts will define the funding landscape for every city, county, and local agency in the country for the next two years. Tools like Granted can help local government agencies identify alternative funding sources and strengthen competitive applications for the programs that survive — because the math of federal-local partnership is changing, and preparation is the only reliable hedge.