The executive order signifies a substantial shift in the US disaster management paradigm, placing increased responsibility on state and local governments. It calls for a review of all infrastructure, continuity, and preparedness policies to update and simplify federal approaches. The order posits that "preparedness is most effectively owned and managed at the state, local, and even individual levels, supported by a competent, accessible, and efficient federal government." It also establishes a National Risk Register to identify, describe, and measure risks to the US’s national infrastructure and aims to streamline federal functions to facilitate collaboration between federal and state entities. While proponents claim that localised disaster preparedness strategies will be more effective in addressing region-specific risks, others worry that a lack of standardised federal oversight could lead to gaps in response efficiency.

The financial ramifications of this policy shift are profound, particularly for states frequently affected by natural disasters. For instance, Florida, which heavily relies on federal disaster relief funds—receiving about $1 billion last year alone for disaster recovery efforts—could face severe financial challenges if federal support diminishes. Without federal assistance, states like Florida may struggle to manage the financial burden of disaster response and recovery, potentially forcing them to increase taxes or reallocate funds from other critical public services.

Similarly, California, identified as highly vulnerable to climate disasters, could see its already fragile disaster response system further strained. The Bay Area alone is projected to incur $4.6 billion in losses this year from climate-related events. Potential cuts to federal funding could exacerbate existing concerns within insurance companies and place additional stress on California's disaster response capabilities. Without the necessary financial backing, rebuilding efforts following disasters could be significantly delayed, prolonging the suffering of affected communities and increasing economic instability.

States employ various budgeting tools to manage disaster-related expenses, including statewide disaster accounts, rainy day funds, supplemental appropriations, transfer authority, and state agency budgets. However, the effectiveness of these tools varies, and not all states have robust mechanisms in place. For example, while 46 states and the District of Columbia have disaster accounts to cover costs incurred by state and sometimes local governments, the frequency and amount of contributions to these accounts differ significantly. New contributions ranged from $250,000 in Nebraska and Rhode Island to $200 million in New York in recent fiscal years. Some states, particularly those with smaller economies, may find it increasingly difficult to allocate adequate funding for disaster preparedness.

Moreover, a 2018 report by The Pew Charitable Trusts found that most states do not comprehensively track natural disaster spending, making it challenging to assess their financial preparedness accurately. This lack of comprehensive data could hinder states' ability to effectively plan for and respond to disasters, especially in the absence of substantial federal support. In turn, this could result in slower response times, inefficient resource distribution, and, ultimately, higher casualties and economic losses.

Critics argue that shifting disaster preparedness responsibilities to state and local governments without adequate federal support could lead to disparities in disaster response and recovery efforts. Rob Moore, director of the flooding solutions team at the Natural Resources Defence Council, accused the administration of systematically weakening disaster readiness. He highlighted that the administration has overseen the dismissal of 1,000 FEMA staff and withheld funding from local and state governments undertaking risk reduction projects. These reductions, critics argue, will leave states without the expertise and logistical support necessary for effective disaster response.

Shana Udvardy, a senior researcher at the Union of Concerned Scientists, expressed concern that the executive order marks "another dangerous step" that would leave communities with fewer resources to prepare for future disasters. She noted that the order shifts most disaster preparedness responsibilities to state and local governments without outlining the federal role or providing necessary funding, potentially leaving communities vulnerable. Without a clear federal framework, coordination between states and the national government could become increasingly fragmented, reducing overall disaster response efficiency.

The policy shift could disproportionately affect disaster-prone states, many of which are Republican-leaning and have historically relied heavily on federal aid during disasters. Experts warn that as natural disasters become more frequent due to climate change, federal assistance remains crucial. Reducing federal cost-sharing could burden states financially, and smaller states might struggle with these responsibilities due to limited resources. Critics, including some Republican lawmakers, emphasise the importance of FEMA’s role and the efficiency gained from federal coordination, arguing that eliminating or reducing FEMA’s involvement could lead to catastrophic consequences during major disasters. The strain on state budgets might also lead to increased dependency on private sector involvement, which may not always prioritise public welfare over profit motives.

While the executive order aims to empower state and local governments in disaster preparedness, the lack of detailed guidance and funding mechanisms raises significant concerns. The financial and operational challenges that states may face could hinder effective disaster response and recovery efforts, potentially leaving communities more vulnerable in the face of increasing natural disasters. A balanced approach that ensures adequate federal support while enhancing state and local capabilities may be essential to maintaining robust disaster preparedness and response systems nationwide. Policymakers must consider ways to mitigate the risks associated with this transition, ensuring that disaster preparedness remains a coordinated effort between all levels of government to safeguard lives and livelihoods effectively.

This article is authored by Ananya Raj Kakoti, scholar, international relations, Jawaharlal Nehru University, New Delhi.