In 2023 and 2024, Florida was battered by back-to-back hurricanes, tropical storms, and flooding that caused more than $38.85 billion in damages.[1] These disasters underscore a growing reality: as climate disasters become more frequent and severe, their costs will escalate, straining households and local governments far beyond their means. For now, federal disaster aid has been the difference between collapse and recovery — not only helping families and local budgets weather the immediate financial shock, but also providing the foundation for longer-term rebuilding of housing, public infrastructure, and local businesses. Yet this federal lifeline is increasingly uncertain, and the question facing Florida is whether it can withstand the next storm if federal policymakers withdraw support.
Florida has over 1.7 million NFIP policies — more than any other state, representing 35 percent of all policies nationwide. A lapse leaves most families unprotected at the peak of hurricane season while also shutting off Florida’s single largest source of recovery dollars.
Over the last two years, the Federal Emergency Management Agency (FEMA), the Department of Housing and Urban Development (HUD), and federal and private insurance programs together delivered over $24 billion to Florida for recovery — including $8.2 billion in National Flood Insurance Program (NFIP) payouts, $7.9 billion in private insurance payouts, $1.8 billion in FEMA Individual Assistance, $2.2 billion in FEMA Public Assistance, and $4 billion in HUD’s Community Development Block Grant–Disaster Recovery (CDBG-DR) grants. (See Table 1.) The federally backed NFIP — which the Trump Administration has proposed privatizing — was the single largest source of recovery funds. That makes the program’s immediate reauthorization deadline, September 30, especially alarming: NFIP has lapsed, freezing new policies and renewals. Florida has over 1.7 million NFIP policies — more than any other state, representing 35 percent of all policies nationwide. A lapse leaves most families unprotected at the peak of hurricane season while also shutting off Florida’s single largest source of recovery dollars.
That makes the program’s immediate reauthorization deadline, September 30, especially alarming: NFIP has lapsed, freezing new policies and renewals.
And NFIP is not the only piece of the safety net at risk. The Trump Administration has already begun cutting FEMA mitigation programs and has pushed to reduce the federal cost-share for disasters — changes that would leave Florida significantly more vulnerable. In short, the very system of federal support that kept Florida’s economy stable after these storms is already on the chopping block.
This blog outlines the size of recent federal funding, the recovery needs it failed to cover, and the potential costs Florida households and governments would face if federal commitments are rolled back.
Significant Federal Aid and Insurance Payouts Cover Just Part of Florida’s Storm Costs
Although Counties Receive Record Aid, Recovery Needs Still Outpace Available Funds
Even with historic federal funding, Florida still faces $14.8 billion in documented unmet recovery needs — costs that arise directly from disaster damages to homes, public infrastructure, and local businesses.[2] These are not discretionary projects or routine budget items: they represent the minimum investment required to bring households, neighborhoods, and businesses back to baseline functioning. Yet that baseline was already marked by deep inequities, particularly in housing, where high costs and limited affordability left many families precariously housed even before the storms hit. It is these same households that face cascading financial harm, with disasters driving steep declines in credit scores, thousands of dollars in new debt burdens, and even pushing some families into homelessness. Not surprisingly, housing accounts for 86 percent of the statewide funding shortfall, with the remainder concentrated in public infrastructure repair and economic revitalization.
Disaster funding underscores two realities: first, that disaster recovery demands extraordinary resources well beyond the reach of normal revenue streams. For example, Florida Commerce’s $925 million award is more than half the agency’s annual budget, Pasco County's award is 21.3 percent of the county's yearly expenditures, and, in St. Petersburg, the award is 16.5 percent of the city's budget. (See Table 2.) Without federal funding, these entities would have to make drastic changes to their annual budgets to address disasters. The second reality is that these storms bring infusions of flexible federal dollars that dwarf typical local appropriations.
At the same time, local governments face revenue and allocation constraints — from tax caps to competing service demands — that limit their ability to finance recovery on their own. The arrival of flexible federal funds highlights these trade-offs: local officials must choose between plugging immediate gaps, investing in long-term resilience and household recovery, or outsourcing dollars through private contractors for big capital projects. Better planning and prioritization could improve outcomes; however, even with stronger fiscal choices at the city and county level, the sheer scale of post-disaster needs makes federal partnership indispensable. Without that partnership, counties would be left with only two options — steep tax hikes or unsustainable debt loads — both of which would weaken recovery rather than support it.
If FEMA Pulls Back, Florida Counties Face Tax Hikes and New Debt
By statute, FEMA covers at least 75 percent of state and local recovery costs. In many catastrophic events, it has gone further, paying 100 percent of cleanup and emergency costs for the first 30 to 60 days. After Hurricane Ian in 2022, for example, FEMA covered $2.2 billion in costs at a 100 percent rate for Lee County’s immediate recovery. (See Figure 2.) Without these higher federal cost shares, counties — particularly smaller, fiscally constrained ones — would have to front millions of dollars they simply don’t have. After Hurricane Michael in 2018, Bay County had to borrow $50 million because FEMA initially limited reimbursement to 75 percent. Lowering the federal cost share, which would require congressional action, would strain state and county rainy-day funds while also slowing down debris removal, infrastructure repairs, and household recovery across Florida. The administration has the authority to eliminate the practice of paying more than 75 percent immediately.
If FEMA had covered 25 percent or nothing, Lee County's reserves would be gone, and the county would have to raise its operating millage rate between 4.69 and 5.21, a 25 to 38 percent increase.
Lee County’s Hurricane Ian experience illustrates the stakes. At a 100 percent federal share, the county’s $2.2 billion cleanup bill was fully reimbursed, and the local budget remained intact. However, if FEMA had applied only its baseline 75 percent share, Lee would have been responsible for $550 million. That figure alone nearly matches the county’s entire reserves, leaving little cushion for ongoing operations or a second storm. At a 50 percent share, Lee would have exhausted all reserves ($662 million) and still needed to borrow about $440 million. Just to cover the debt, Lee County would have had to approve a 0.41 mill increase to its operating millage (3.7623), roughly an 11 percent increase. If FEMA had covered 25 percent or nothing, Lee County's reserves would be gone, and the county would have to raise its operating millage rate between 4.69 and 5.21, a 25 to 38 percent increase. (See Figure 2.)
And FEMA’s role goes beyond county budgets. After Ian, FEMA also provided rental assistance to 386,000 households and arranged temporary lodging for 1,360 survivors. Put differently, FEMA directly supported more households than the entire population of Miami Beach, a scale of intervention that kept tens of thousands of families from slipping into homelessness and unsafe housing. Without such assistance, Florida’s already fragile housing market — where rents spiked by more than 30 percent in the Fort Myers area after Ian — would have faced even greater stress, with local governments left to absorb infrastructure costs and a surge in emergency sheltering needs.
The stakes of federal retreat come into sharp focus here. Even a large, relatively well-resourced county like Lee would run out of fiscal runway quickly if FEMA scales back its commitment. For smaller counties with leaner budgets, the results would be even more dramatic: reserves would vanish after the first storm, and borrowing at this scale would push local governments into unsustainable debt or force deep cuts elsewhere. In practice, reducing the federal cost share shifts risk directly onto households and property taxpayers, compounding affordability pressures in a state already facing soaring insurance premiums and housing costs.
At the same time, the Trump Administration has already begun cutting pre-disaster mitigation funding. Florida communities lost $293.2 million in FEMA’s Building Resilient Infrastructure and Communities program in 2025, spanning more than 25 jurisdictions statewide. Nearly 90 percent of the cuts fell on community protection projects, such as gray/green infrastructure, home elevations, buyouts, and flood control, which directly reduce household and neighborhood risk. The remaining 10 percent was allocated for critical facilities, such as safe rooms, generators, and pump stations, leaving both large-scale infrastructure and local safety upgrades unfunded.
The administration has also signaled its intention to eliminate Hazard Mitigation Grant Program dollars that have supported initiatives like Elevate Florida, a residential mitigation program that received $400 million in its most recent round of funding and is already oversubscribed.
The administration has also signaled its intention to eliminate Hazard Mitigation Grant Program dollars that have supported initiatives like Elevate Florida, a residential mitigation program that received $400 million in its most recent round of funding and is already oversubscribed. Programs like Elevate Florida are critical not only because they help households harden their homes, but also because they stabilize local property markets by keeping homes habitable, on the tax rolls, and families securely housed. These cuts don’t just undermine resilience for the next storm — they also have immediate fiscal impacts, forcing cities and counties to cover more of the costs themselves or defer projects entirely, putting added strain on local budgets.
Federal Disaster Aid Covers Billions Florida Can’t Afford Alone
Florida’s recovery from 2023–24 storms depended on more than $24 billion in federal and insurance dollars. HUD’s CDBG-DR allocations, FEMA aid, and NFIP payouts together kept families housed, local budgets solvent, and property markets from collapse. These dollars are the foundation of Florida’s disaster recovery system.
If that federal lifeline shrinks, counties would be forced to shoulder billions on their own. Lee County’s Hurricane Ian cleanup shows the math: without 100 percent federal reimbursement, the county would have faced a $550 million bill at the standard 75 percent FEMA cost share, and over $1 billion at a 50 percent share — sums that would have wiped out reserves, forced heavy new borrowing, and driven property tax hikes of 11-38 percent. Smaller counties with thinner budgets would have even fewer options, running out of fiscal runway after a single storm.
Florida does not have the fiscal capacity to replace federal disaster aid with local revenue.
And beyond FEMA and HUD, the the reauthorization deadline for NFIP, September 30, has passed. If Congress fails to act, Florida could lose both critical household coverage and billions in recovery capacity, compounding the tax hikes and debt risks counties already face if FEMA support recedes.
Florida does not have the fiscal capacity to replace federal disaster aid with local revenue. Every cut to FEMA or HUD programs translates directly into higher local taxes, unsustainable debt, and unmet recovery needs. Federal dollars are the difference between solvency and fiscal crisis — without them, Florida families, communities, and markets would face a financial storm long after the storms pass.
Notes
[1] Florida Policy Institute calculations based on all publicly reported damage claims, including FEMA Individual Assistance and Public Assistance figures, private insurance catastrophe claims reported by the Florida Office of Insurance Regulation, National Flood Insurance Program payouts, Community Development Block Grant-Disaster Recovery funding from the Office of Housing and Urban Development, and Unmet Need calculations included in the 10 currently available Florida CDBG-DR Action Plans; two Action Plans have yet to be published (for Broward County and Ft. Lauderdale).
[2] Once data from the Ft. Lauderdale Action Plan, Broward County Action Plan, and Small Business Administration Disaster Loans are incorporated, the unmet needs figure and overall disaster impacts of 2023 and 2024 is expected to rise.
