All of this concerns state and local governments that are heavily reliant on federal aid. The Trump administration is signaling that in many program areas, they’ll be on their own more often, including during disasters.
More of a hands-off approach can lead to new opportunities, but change always brings uncertainty.
"I've been doing this for close to 35 years, and I see this is definitely the most transformational time in my career," says Matt Chase, the executive director of the National Association of Counties (NACo). “With the federal funding freeze, and just the unpredictable nature of whether the federal government will honor existing contractual agreements and what will happen with future appropriations, all that is front and center."
Still, Chase is telling county leaders to be patient, to wait and see how various program areas will or will not be reshaped once Congress weighs in. “We're trying to stick to the facts and we're trying to stick to keeping lines of communication open among the different federal, state and local levels of government,” he says.
Governing spoke with Chase at NACo’s offices on Capitol Hill. Below are edited excerpts from that interview:
Governing: This is clearly a time of change in Washington. What are your members concerned about?
Chase: What we're telling our members is there's no such thing as status quo, that things are going to change, and we've got to think about the solutions, and we've got to think about how do we navigate all this change? And I think for state and local governments, everything is on the table. We don't see any of our programs, any of our tax policies, any federal policy, that is untouchable.
And so you have to start with the mindset that literally everything is on the table. There are no sacred programs or policies. Whatever you care about, you better be advocating for in a smart way.
For NACo and our counties, we touch almost every federal agency. I used to say, everything but defense and places like NASA — but we have partnerships with NASA and the Department of Defense. So we touch literally every federal agency. They're all going through transformational change.
Governing: If things are changing, what do you see as some of the opportunities?
Chase: The opportunities are really around regulatory reforms. It's around reallocating some of the American Rescue Plan money that was not pushed out the door, or the bipartisan infrastructure law. There were programs like the broadband program where there's still $40 billion that can be allocated. And so I think there's some opportunities to work with the administration around infrastructure, around getting projects to move faster.
Governing: The first Trump administration did a tremendous amount of outreach to NACo and counties. Do they still see counties as a key partner?
Chase: I think so. The White House is restarting the County Days in a couple of weeks. They're going to start with Ohio, and they will be inviting county leaders from across the country to come in and spend the day at the White House with the president, vice president, cabinet secretaries and other White House officials, to really focus on federal-to-county discussions around key priorities. We're going to be vocal about our priorities, but respectful, and so we'll see how that plays out.
Governing: What are some of the things counties are worried about with the new administration and its efforts to cut spending?
Chase: There are a lot, but our top three or four are multibillion-dollar problems.
No. 1, we want to preserve tax-free municipal bonds. Every 10 years, state and local governments, including special purpose districts, invest about $4 trillion through tax and municipal bonds. Our message to the White House and in Congress is that these are market-driven investments. These bonds are funding fundamental infrastructure, water and sewer, schools, hospitals, roads and bridges, airports, etc.
And so if the federal government is going to cut back on grant dollars, then this is the time we really need capital markets to invest in our local infrastructure. They've been around forever, and it's a core principle that governments don't tax each other. So we're really hopeful there.
Phil Galewitz/TNS
Second would be Medicaid. We have counties in over 25 states that have a direct role in Medicaid. We help determine eligibility in some states and then counties own about 1,000 public hospitals, 700 long-term care facilities, including nursing homes, skilled nursing, and our behavioral health and public health authorities.
And then our third is around FEMA [Federal Emergency Management Agency] and potential significant reforms to FEMA. Everything is on the table from just outright eliminating FEMA, maybe salvaging some core life-saving, life-sustaining services, to more limited reforms, particularly around public assistance for our infrastructure, debris removal and other long-term recovery efforts.
Those are the big multibillion-dollar ones. There's literally dozens of others across the board.
Governing: Aside from Washington, what are the main issues that county officials are thinking about this year?
One of our long-standing priorities has been around broadband. We have literally an explosion of proposals for data centers in rural America, either exurbs to major urban areas or outright rural. What I say to them is, one, hopefully you get to keep the tax revenue that's generated from these facilities. What we’re seeing is that states try and grab the revenue. Two, there's going to be a lot of local opposition.
Our priorities have also been around behavioral health, substance abuse and mental health and housing affordability. In the last five to 10 years, I would say the emerging issue is really around land use. The top issue that I hear from our members is what to do with our land. One, does the county even have any land-use authority? Do we use our land for housing, agriculture, open preservation, industrial parks, and now energy?
Governing: Education is another area that’s seeing federal cuts. How is that affecting counties?
Chase: What county officials are concerned about are, one, federal cutbacks, particularly for children with disabilities. If K-12 schools can't afford that, these kids will end up in the county social safety net.
Two, I think the No. 1 issue that county governments as employers, and counties as leaders of community, are facing is the workforce shortage, and having a knowledge-based, skilled workforce. You need the fundamentals of a drug-free workforce and you need people with modern skills. As we try to reshore or onshore manufacturing, these require skills. We’ve got to make sure folks are educated. It doesn't have to be four-year degrees, but we definitely need technical skills and basic-level critical thinking.
Governing: Workforce has been a drumbeat for state and local governments.
Chase: That is definitely front of mind. If you talk to county administrators, they will tell you the No. 1 issue is retaining and hiring a high-quality county workforce.
That’s where we do see some opportunities with GenAI [generative AI] tools to help, particularly around record management and grant writing and a lot of the paperwork-type-related jobs. We want to make sure that it's not replacing workers, but if we can free up more of our county workforces' time to deal directly with residents, to be out in the communities, we think that could be a positive.
