Emergency management reforms are well underway and are driving a shift toward a more state-led disaster management model. As federal roles continue to evolve, state and local governments are assuming greater responsibility for planning, managing, and delivering disaster assistance.
Last month, President Trump extended the Federal Emergency Management Agency (FEMA) Review Council into late March 2026, creating a limited window to clarify potential structural and programmatic changes. During this period, public reporting on the Council’s draft concepts has emphasized efficiency, consolidation, and a more limited federal operational footprint. Reported themes include keeping FEMA within the Department of Homeland Security (DHS), shifting toward condition- or formula-based triggers for certain types of assistance, and streamlining Individual Assistance (IA) into a single application and payment structure. These concepts remain under development, and final executive or legislative actions have not yet confirmed which elements, if any, will move forward following the Council’s recommendations.
Additionally, ongoing discussions of FEMA’s staffing posture and delivery model also point to a smaller federal workforce and greater reliance on state and local systems to manage early coordination and program administration.
Congressional Action
Congress will also shape the next phase of emergency management reform. Lawmakers continue to consider the Fixing Emergency Management for Americans (FEMA) Act of 2025. As drafted, this legislation signals congressional interest in clarifying federal, state, and local roles in disaster management, while remaining subject to revision.
At the same time, FEMA funding discussions now intersect with Fiscal Year (FY) 2026 Department of Homeland Security (DHS) appropriations, offering an early indication of how future disaster assistance may be structured and governed. Draft FY 2026 appropriations legislation (H.R. 7147) and its accompanying explanatory statement reflect Congress’s intent to fully fund FEMA while ensuring the agency can meet its statutory responsibilities, including:
- Sustaining investment in the Disaster Relief Fund (DRF) and FEMA operations.
- Establishing clearer congressional guardrails around major structural changes, such as eliminating programs or consolidating regional offices without explicit legislative approval.
- Increasing oversight of mitigation and resilience programs, including added reporting and briefing requirements tied to the Hazard Mitigation Grant Program (HMGP) and the Building Resilient Infrastructure and Communities (BRIC) program, with attention to execution, access barriers, and the status of delayed or terminated awards.
Together, these policy and funding actions point to a disaster management system already in transition.
A System in Transition
State and local governments already see these shifts in how disasters are reviewed, funded, and supported. In April 2025, FEMA outlined actions to rebalance its role, including raising Public Assistance (PA) declaration thresholds to more than four times the current per-capita indicator. As a result, the system now reflects:
- Longer review timelines and expanded eligibility review, which increase the importance of state-led stabilization while federal assistance programs remain under evaluation or activation.
- More consistent federal cost-share approaches, which heighten the need for state funding strategies that support early response and recovery when immediate action is required.
- A more focused federal field presence, prompting states to take on larger roles in damage assessments, applicant coordination, survivor engagement, and early recovery planning.
- Fewer disaster declarations overall, which increase reliance on state and local resources to support sheltering and short-term housing when FEMA Individual Assistance (IA) is unavailable
- A reduced federal survivor-facing footprint, including fewer Disaster Recovery Centers (DRCs) and more limited FEMA Individual and Household Programs (IHP) outreach during early recovery.
What Initial Reforms Mean for State and Local Governments
These changes require states to lead earlier in the disaster management lifecycle. This shift is most visible during events that fall below major disaster declaration thresholds or move slowly through federal review. Core stabilization needs remain the same—debris removal, emergency access, water support, sheltering, and emergency protective measures continue to define early recovery. What has changed is decision-making authority: states now set priorities earlier, mobilize resources more quickly, and manage expectations when federal involvement is limited or still evolving.
Governance and organizational structure now play a larger role in disaster recovery outcomes. Recovery efforts span multiple state functions, including emergency management, housing, infrastructure, public health, finance, and information technology. States that define roles clearly, reduce duplication, and align authority across agencies deliver more coordinated and consistent recovery support.
Accordingly, regional coordination and mutual aid agreements have also grown in importance. As federal field presence narrows, states depend more on shared capacity and partnerships. To be successful, states must understand existing capabilities, constraints, and interdependencies across agencies as they take on greater responsibility earlier in recovery.
Instead of waiting for a disaster to expose gaps, states can conduct targeted emergency management capability assessments to evaluate readiness across key areas:
- Operational coordination, including how teams conduct initial damage assessments, share situational information, and scale field coordination in the first days of an event.
- Logistics and resource management, such as how agencies activate, track, and manage supplies, equipment, contracts, and vendors.
- Budget authority and financial flexibility, including how quickly states release funds and apply financial controls during early response and recovery.
- Technology and data systems, including the use of tools like artificial intelligence to support assessments, application intake, document review, and program monitoring.
- Workforce capacity, including surge staffing models, cross-agency activation roles, and the use of vendors or mutual aid.
- Mitigation and resilience planning, including how risk data, prior investments, and future funding priorities inform recovery decisions.
Filling Gaps in Disaster Management Through State-Led Planning
Some states respond more effectively because they plan for recovery before disasters occur. Others rely on one-time actions during active events. All states need to review capacity and capabilities. This review helps prepare for situations where federal disaster assistance does not apply to smaller or localized events. It also helps when federal support remains limited even after approval.
Several states operate recovery programs that mirror FEMA Public Assistance (PA) and Individual Assistance (IA). These programs support local governments and households. Even so, states must reassess these programs to confirm they can meet future needs.
California often serves as an example utilizing state-funded mechanisms to support debris removal and emergency protective measures while federal processes developed. Alaska and Mississippi have also used state programs to address housing needs, unmet needs, and short-term recovery gaps when federal assistance did not meet immediate conditions.
Regardless of existing programs, state-led disaster management planning requires reassessing a consistent set of foundational factors, starting with the following five:
- Clarify the state’s recovery role. States need to clearly define their role in recovery. This includes deciding whether state support is focused on local governments, individuals and households, or both—and ensuring that role is designed to complement, not replace, federal assistance. Planning should also confirm whether the state will rely on existing statutory authority or operate through a defined recovery program.
- Define activation, eligibility, and duration of resources. States should establish clear parameters for when recovery support begins, who qualifies, and how long assistance will be available. This includes setting thresholds or triggers for state involvement; defining eligibility criteria for jurisdictions and households; outlining application and delivery timelines; and establishing limits on the duration of state support. Clear definitions help states prioritize what they can realistically and sustainably support.
- Planning helps states focus resources where they have the greatest impact. States cannot fully replace federal disaster assistance. As a result, leaders must make deliberate choices during response and recovery. While every response is different, planning allows states to decide which needs come first, where state resources can fill gaps, and when federal programs remain essential.
- Establish and reassess authority and governance. Effective recovery depends on clear authority and accountability. Planning should identify involved agencies and define how leaders coordinate decisions. It should also clarify which legal or policy authorities already exist and which may require future action.
- Align funding and capacity. Funding and staffing directly support disaster management strategy. States need a clear view of how state resources align with federal assistance. They also need to manage financial risk over time and sustain recovery operations as demands grow.
When key decisions are not made in advance, states often encounter the same challenges during a disaster. Roles and responsibilities shift mid-response, creating confusion and slowing progress. Activation and eligibility decisions are made only after needs escalate, rather than ahead of time. As recovery continues, staffing and operational capacity become strained, funding relies on one-time or ad hoc approvals that limit flexibility, and mitigation and resilience planning remain disconnected from recovery efforts.
Planning ahead helps states move away from this reactive cycle. By defining when and how the state will engage, setting realistic expectations for the level of support that can be provided, and establishing clear approaches to funding and capacity management, states can build a more stable and predictable recovery framework for future events.
What States Should Do Next
Proactive planning helps states identify gaps before disasters occur. It allows leaders to align recovery actions with policy priorities and set clear decision-making processes. A defined state-led disaster recovery strategy gives states the flexibility to adapt as conditions change. It also supports a more consistent and coordinated response.
Hagerty works with states on strategic emergency management recovery capability assessments, including disaster recovery planning. This work helps clarify roles, confirm priorities, and establish decision-making structures that are ready to activate when needed. Planning now helps states respond more efficiently and stay aligned with long-term objectives when the next disaster occurs.
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