County Leaders Discuss Federal Policy Changes and Local Government Challenges

About NACo

Chase explained that NACo, now in its 90th year, represents 3,069 counties across the United States. 

“We’re not a special interest group, and I think that’s really important for folks to recognize," Chase said. "We represent counties as an intergovernmental partner.”

Major Federal Policy Issues

The conversation touched on several pressing concerns for county leaders. According to Chase, the relationship between federal, state and local governments is dramatically changing.

“Right now, I think we’re probably seeing the biggest transformation of federal, state, local partnerships in the last 50 years,” Chase noted. “We’re seeing a tremendous amount of devolution of funding responsibilities but also seeing some major preemption and some major growth in federal mandates.”

The number one issue facing counties involves municipal bonds and potential changes to their tax-exempt status. Chase warned that if Congress eliminates this tax exemption, it could increase borrowing costs for counties by 2.1%, resulting in an $860 billion increase nationwide while only generating $320 billion in federal revenue.

Executive Orders and Budget Reconciliation

Hill and Chase discussed the impact of executive orders on county operations. Chase mentioned that NACo is tracking over 100 executive orders affecting counties, particularly those related to immigration, elections, energy policy and federal funding freezes.

The budget reconciliation process was also highlighted as a major concern. 

Chase explained this process allows bills to pass in the Senate without requiring 60 votes. Current proposals could extend tax breaks while making cuts to various human services, directly impacting counties.

Emerging Issues

The conversation shifted to emerging challenges facing counties, including:

• Artificial Intelligence (AI) - The leaders discussed how AI can help counties deal with workforce shortages and increased service demands.
• Energy needs - The growth of data centers, with Northern Virginia hosting 2,900, creates both challenges and opportunities for counties.
• Housing affordability - Chase noted that housing has moved from a top 10 issue to a top two issue for counties in recent years.

Chase also observed a shift from focusing on homeownership to rental housing, which has implications for counties relying on property taxes.

NACo’s Initiatives

Beyond advocacy, NACo helps counties work together through programs like national cooperative purchasing. This allows smaller counties to benefit from the scale and expertise of larger ones like Fairfax County. NACo has also launched its own pharmacy benefit manager to lower prescription drug costs.

The podcast also highlighted NACo’s Stepping Up Initiative, which recently celebrated its 10-year anniversary. This program works to reduce the number of people with mental health issues in jails. 

Fairfax County’s Diversion First program was recognized as one of only 54 “accelerator counties” leading this effort nationally.

“Fairfax County has also been instrumental in helping us build national cooperative purchasing, where Fairfax [County] is often a lead public agency for us and helping us use your scale and your expertise in these things like procurement and to help smaller counties,” Chase explained.

Connect With County Leaders Podcast

The “Connect with County Leaders” podcast is a monthly opportunity to meet and connect with Fairfax County leaders, to learn about the latest county news and information, and hear more on specific programs and services in Fairfax County.

Listen or watch past episodes of “Connect with County Leaders” on SoundCloud, on YouTube and on Channel 16’s podcast on demand page. For other Fairfax County podcasts, visit www.fairfaxcounty.gov/podcasts, and for additional audio content, tune in to Fairfax County Government Radio at www.fairfaxcounty.gov/radio.