The National Association of Counties (NACo) Large Urban County Caucus (LUCC) convened on September 30 for an update on federal policy developments and a discussion of emerging challenges facing counties across the country. ISACo staff attended the virtual meeting.
The meeting included remarks from NACo President and Mecklenburg County, North Carolina Commissioner George Dunlap about his presidential initiative, “Building Better Futures.” The initiative focuses on improving opportunities for young people and addressing challenges such as homelessness and mental health. Dunlap encouraged counties to identify at least one action they can take to improve outcomes for young people and adopt a resolution highlighting that commitment. NACo plans to make those resolutions available so counties can learn from and potentially replicate successful approaches.
Federal Funding and OMB Uniform Guidance
NACo staff provided an update on proposed changes to federal grant requirements under the Office of Management and Budget’s Uniform Guidance. Implementation of the changes has been delayed until at least December 11 as part of the continuing resolution funding the federal government.
NACo continues to seek a further delay or cancellation of the changes and is encouraging counties to communicate with members of Congress about their potential local impacts. NACo has developed resources and template letters counties can use as part of those advocacy efforts.
County officials echoed concerns about conditions being attached to federal grant programs as a result of the proposed changes to federal grant requirements.
A Washington County, Oregon official said some federal grant requirements conflict with state law, potentially jeopardizing substantial federal funding for housing, mental health, law enforcement and emergency preparedness programs. Other county officials discussed litigation challenging federal funding conditions and suggested NACo could provide counties with information about successful legal strategies being pursued around the country.
The discussion underscored the importance of federal funding predictability for counties responsible for administering programs and services that depend heavily on federal assistance.
The December 11 end point for existing continuing resolution funding also creates uncertainty surrounding broader federal appropriations beyond that date. According to the update, none of the 12 regular appropriations bills had completed the legislative process at the time of the meeting, leaving Congress with a relatively narrow window to address federal funding after returning from the midterm elections.
Census Proposal Raises County Concerns
NACo also highlighted a proposed federal census rule that could have significant implications for counties.
According to the presentation, the proposal would restrict certain data collection to U.S. citizens and lawful permanent residents and remove some demographic questions from the decennial census questionnaire. NACo staff expressed concern that the changes could contribute to an undercount and affect federal programs that distribute funding based on population or other census-derived data. NACo indicated it would submit comments on the proposal.
Because census data play an important role in determining the distribution of federal resources, changes affecting population counts could have consequences for counties participating in formula-based federal programs.
Property Taxes and Alternative County Revenue
Much of the discussion among county officials centered on growing fiscal pressures and the heavy reliance of many counties on property taxes.
Participants discussed state-imposed property tax limitations, increasing service responsibilities and the possibility of providing counties with additional revenue options. One suggestion was for NACo to compile information identifying states that authorize counties to impose local-option sales taxes, business taxes or other revenue sources—and determine which counties have actually exercised those authorities.
NACo staff indicated that the organization has previously examined revenue authorities granted to counties by states but has not necessarily conducted a county-by-county analysis of how those authorities are being used. Staff expressed interest in further research on the issue.
Officials also shared examples of possible alternative revenue streams, including voter-approved taxes or fees dedicated to specific services. The discussion reflected a broader concern that counties are being asked to maintain or expand services while traditional federal, state and local revenue sources face increasing uncertainty.
Data Centers Emerge as a Local Government Issue
Data centers were identified as another growing issue for counties and municipalities.
Participants discussed local moratoriums on data center development and the need for communities to better understand issues involving infrastructure, electricity, water and other costs associated with these facilities. Officials suggested that future LUCC discussions could examine how counties are addressing data center development and provide information that local governments can use when considering regulations or development proposals.
The discussion is particularly relevant as communities across the country consider how to balance economic development opportunities associated with data centers against demands on local infrastructure and public resources.
Looking Ahead
NACo plans to resume monthly LUCC calls to provide county officials with more regular opportunities to discuss federal policy and exchange ideas and best practices. Future topics suggested during the September meeting include property tax pressures, alternative county revenue sources, data center development, title and deed fraud, federal grant conditions and strategies for addressing unfunded mandates.
The caucus will also meet during NACo’s upcoming symposium in Charlotte, North Carolina, as well as during the 2027 Legislative Conference and Annual Conference.
ISACo will continue monitoring these federal policy developments and their potential implications for Illinois counties.