Summary of May 8th NACA Virtual Idea Exchange
County administrators and managers from across the nation gathered on May 8, 2025 to discuss the rapidly changing federal funding environment and its impact on local government operations. The conversation centered on the immediate challenges posed by federal funding cuts, new compliance requirements, and shifting legal and political landscapes.
Key discussion points included:
Federal Funding Withdrawals and Legal Responses: Many counties are facing sudden withdrawals of federal funding, prompting both immediate legal challenges and strategic communications efforts. Administrators reported mobilizing staff and lobbyists to advocate for the restoration of funds, shifting messaging to emphasize the impact on residents, and issuing news releases to raise public awareness. Even traditionally conservative commissions expressed frustration, with several counties preparing for or initiating lawsuits.
Resource Strain and Compliance: Counties are dedicating significant staff time and resources to monitor new federal executive orders and prepare for potential legal action. Participants shared strategies for communicating these challenges to the public, including transparent updates and targeted outreach to build community support.
Operational Disruptions: Changes in federal requirements have affected staff roles, especially positions filled by those who are not U.S. citizens. These changes are forcing counties to reassign responsibilities and reconsider long-term staffing solutions.
Impact on Local Services and Programs: The loss or reduction of federal grants and funding has severely impacted essential services such as Meals on Wheels, rent and utility assistance, housing and homeless services, and weatherization programs. Counties are struggling to fill funding gaps and plan for the future. There is uncertainty about whether some funding reductions are temporary or permanent, and mixed signals from federal agencies have complicated planning. Counties are bracing for further cuts as new appropriations take effect in October.
Economic Impacts and Tariffs: Administrators expressed concern about the potential impact of tariffs on local businesses and tax revenues. Vendors are increasingly passing tariff-related costs to counties, complicating procurement and budgeting. Some counties have pre-purchased materials to mitigate these effects Some counties are already anticipating declines in sales tax revenue and increased financial pressures.
Workforce and Legal Concerns: Counties are fielding questions from employees about potential criminal liability related to enforcement of federal immigration or healthcare policies, particularly concerning marginalized groups.
Homelessness and Social Services: Decreases in sales and property transfer tax receipts are straining resources for affordable housing and homelessness programs. Administrators reported increased demand for shelter beds and anticipated a significant rise in the unhoused population by 2028.
Shifts in DEI (Diversity, Equity, Inclusion) Approaches: Several counties have reassessed or reduced DEI initiatives in response to legal changes and state directives. Some are redefining equity to comply with new interpretations of anti-discrimination law, while others have eliminated DEI-focused positions. The group discussed the challenge of balancing organizational values with financial realities and legal constraints.
Takeaways
County leaders are in “fight mode,” actively seeking legal remedies, advocating for restored funding, and adapting operations to maintain essential services. They are closely monitoring the evolving federal landscape, sharing best practices for communication and compliance, and preparing for both immediate and long-term impacts on their communities. The need for collaboration, innovation, and transparency was a recurring theme as counties navigate this period of significant uncertainty and change.
Upcoming Idea Exchanges
July 12 - Idea Exchange #1 in-person at NACo Annual Conference
July 13 - Idea Change #2 in-person at NACo Annual Conference
September - Virtual Idea Exchange (date TBD)
October 27 - Idea Exchange #1 in-person at ICMA Annual Conference
October 28 - Idea Exchange #2 in-person at ICMA Annual Conference
December - Virtual Idea Exchange (date TBD)