Understanding FEMA Cost Share
Municipalities rely heavily on the Federal Emergency Management Agency (FEMA) financial assistance when disaster strikes, and the FEMA cost share is critical to understanding how recovery costs are distributed. One essential component of this assistance is FEMA’s cost-sharing structure, which determines how recovery expenses are divided among federal, state, and local governments. However, beyond cost sharing, it’s also important to understand what types of expenses FEMA reimburses and what additional funding sources local governments can tap into to cover costs not addressed by FEMA. This guide explores both the basics of FEMA’s cost share and the full range of funding opportunities available for disaster recovery.


What is Federal-State-Local Cost Share?
FEMA’s cost share is a financial arrangement that determines how much of the recovery costs each level of government—federal, state, and local—will cover. It ensures that the financial burden of recovery is shared, allowing local governments to receive significant federal support.
Typically, FEMA covers a large portion of the costs, with state and local governments responsible for the remainder. This cost-sharing applies to FEMA’s Public Assistance (PA) and Individual Assistance (IA) programs, which provide aid for infrastructure repairs, public safety measures, and assistance to individuals and households impacted by disasters.
Common Tiers of FEMA Cost Share Based on Disaster Severity
FEMA’s cost share is not a one-size-fits-all model; it changes depending on the scale and severity of the disaster. Information on the exact cost share for your disaster will be part of the federal disaster declaration for that event. Below are some of the most common cost-sharing structures:
Standard Cost Share (75/25)
Severe Disaster Events (90/10)
In cases of extreme disasters, such as major hurricanes or catastrophic floods, FEMA may increase its share to 90%, leaving state and local governments responsible for just 10%. This higher federal contribution typically applies when the disaster has caused widespread damage and the cost of recovery is expected to be exceptionally high.
Small Disasters (50/50)
For minor disaster events that still qualify for federal assistance, the cost share may be evenly split, with FEMA covering 50% and the state and local entities covering the other 50%. This approach is less common but may apply in lower-impact scenarios.
Emergency Work
For emergency protective measures taken to save lives, protect property, or ensure public safety, FEMA typically covers 75%, with the possibility of increasing to 90% in certain circumstances.
How States and Localities Divide the Non-Federal Share
While FEMA determines the federal portion, each state decides how to divide the remaining non-federal share between state and local governments. This division can vary significantly from state to state. Local officials should be aware of their state’s specific policies regarding the division of cost share responsibilities, as this can significantly affect municipal budgets during the recovery process.
State-Heavy Cost Burden
Some states take on a large portion of the non-federal share, covering 20-25% of the total recovery costs, leaving local governments with a minimal share, sometimes as low as 5%. This can be helpful for smaller municipalities with limited financial resources.
Shared Responsibility
Local-Heavy Cost Burden
In some cases, states may require local governments to bear a larger portion of the non-federal share, with local entities covering 15-20% of the costs. This often happens in states with decentralized disaster recovery policies or more limited state budgets.
Local officials should be aware of their state’s specific policies regarding the division of cost share responsibilities, as this can significantly affect municipal budgets during the recovery process.
FEMA-Reimbursable Expenses
Emergency Work
(Categories A&B)
- Debris Removal (Category A): Covers the cost of removing debris from public roads, rights-of-way, and public property to ensure public safety.
- Emergency Protective Measures (Category B): Includes expenses for actions taken to protect lives, public health, and property, such as setting up emergency shelters, sandbagging, or providing emergency medical care.
Permanent Work
(Categories C-G)
- Category C: Repair or replacement of roads and bridges.
- Category D: Repair or replacement of water control facilities like levees and dams.
- Category E: Repair or replacement of public buildings and their contents.
- Category F: Repair or replacement of utilities such as power plants, water systems, and sewage treatment facilities.
- Category G: Repair or replacement of parks, recreational areas, and other public-use infrastructure.
In addition, FEMA may reimburse local governments for administrative costs related to managing the recovery process, referred to as Direct Administrative Costs (DAC). Furthermore, through the Hazard Mitigation Grant Program (HMGP), FEMA provides funding for long-term mitigation projects designed to reduce the risk of future disasters.
FEMA-Reimbursable Expenses
State Emergency Management Funds:
Many states have their own emergency management programs that provide financial assistance to cover the state’s share of disaster recovery costs or supplement FEMA funding.
Community Development Block Grants (CDBG-DR):
These grants, provided by the U.S. Department of Housing and Urban Development (HUD), fund long-term recovery projects, such as infrastructure rebuilding, housing, and economic recovery in disaster-affected areas.
U.S. Department of Agriculture (USDA) Emergency Programs:
For rural communities and agricultural areas, the USDA offers programs such as the Emergency Watershed Protection Program and disaster loans to help restore farmland and rural infrastructure.
Federal Highway Administration (FHWA) Emergency Relief (ER) Program:
If a disaster damages federal-aid highways, the FHWA provides funding for the repair and restoration of transportation infrastructure.
State and Local Bonds:
Some municipalities may issue bonds to fund recovery and mitigation projects, providing a long-term financial solution to address disaster-related costs not covered by FEMA or other federal programs.
Private Grants and Donations:
Non-profit organizations and private foundations often provide grants or donations to support local disaster recovery efforts, especially for projects aimed at rebuilding communities and addressing unmet needs.
FEMA-Reimbursable Expenses
Understanding FEMA’s cost share system and reimbursement structure is critical for local officials as they navigate the financial complexities of disaster recovery. Knowing what expenses are eligible for FEMA reimbursement and exploring additional funding sources can help municipalities manage recovery costs more effectively. By leveraging federal, state, and private resources, local governments can not only recover from disasters but also invest in future resilience.
For guidance on FEMA cost share and assistance in securing additional funding, Berquist Recovery Consulting is here to help. We specialize in helping communities maximize available resources for disaster recovery and long-term mitigation. Reach out to us for expert support in managing your recovery efforts.