Federal disaster aid at risk as North Carolina faces growing recovery costs

Nearly a year after Hurricane Helene ripped through Western North Carolina, John Council still keeps an overnight bag packed.

The storm flooded roads, knocked out power for more than two weeks, and left his Sugar Grove home surrounded by landslides. Even small rainstorms, he said, now trigger renewed anxiety.

“We’re still in a recovery period,” Council said. “Even smaller rain events trigger new landslides. It compounds the damage we already had.”

Council and his wife received FEMA assistance to repair their roof and cover other losses after Hurricane Helene. But many of his neighbors weren’t as fortunate. Few carried flood insurance, assuming mountain communities were safe from catastrophic flooding.

“FEMA exists to bridge the gap between what insurance covers and actual losses,” Council said. “But a lot of people fell through the cracks because the playbook wasn’t written for a hurricane that devastated the mountains.”

Rising Costs, Rising Risks

Helene’s destruction is part of a larger pattern. Nationwide, the U.S. endured 403 billion-dollar weather and climate disasters between 1980 and 2024, causing nearly $3 trillion in damage, according to NOAA. In 2024 alone, there were 27 billion-dollar disasters, and 15 more have already been recorded in just the first half of 2025.

In May 2025, NOAA announced it would no longer update its “Billion-Dollar Weather and Climate Disasters” database, citing “evolving priorities, statutory mandates and staffing changes.” The historical records remain available through 2024, but no new events are being tracked publicly.

Scientists and insurers warn these costs will keep climbing as storms grow stronger and population growth pushes more development into high-risk areas.

“When your insurer raises rates and cites climate change, homeowners should pay attention,” said Rob Bhatt, an insurance analyst with ValuePenguin. “We’re seeing more disasters, stronger storms, and more people living in vulnerable places. That’s driving up recovery needs.”

In North Carolina, homeowners are already feeling the squeeze: insurers have decided not to renew coverage on nearly 1 in 25 properties along some parts of the coast.

A Safety Net Under Pressure

A recent ValuePenguin analysis underscores how much North Carolina relies on FEMA’s disaster aid. The state received $2.7 billion between 2022 and 2024 — the 12th highest total in the country.

That funding supported grants to stabilize damaged homes, temporary housing assistance and large-scale repairs to public infrastructure. 

“If that money goes away, the state has to fill the gap,” Bhatt said. “States operate on balanced budgets. They can issue bonds, but they can’t run deficits like the federal government. Finding billions more after a disaster would be extremely challenging.”

But FEMA itself is under strain. In August, several employees were placed on administrative leave after signing a dissent letter warning that staffing cuts and new cost-control policies have weakened the agency’s ability to respond.

North Carolina’s Uncertain Preparedness

North Carolina’s own reserves are also depleted. The state’s disaster-specific savings fund has fallen from $720 million to $110 million over the past year, largely due to Helene recovery. Lawmakers remain deadlocked on replenishing it.

Gov. Josh Stein has pressed Homeland Security Secretary Kristi Noem to speed up federal reimbursements. FEMA has approved much of the funding, but new DHS rules requiring Noem’s personal sign-off have slowed payments. The slowdown means tens of millions of dollars in recovery costs are stuck in limbo, forcing local city, county and state agencies to cover expenses they expected the federal government to reimburse.

State Emergency Management Director Will Ray said FEMA personnel remain embedded with North Carolina’s response teams but acknowledged that delays are creating “complications for recovery planning.”

By the Numbers

ValuePenguin’s analysis shows the scale of North Carolina’s reliance on federal disaster aid:

• North Carolina: $2.7 billion in FEMA aid (2022–24); $547.2 million per disaster; 1.39% of total state spending
• Virginia: $4.1 billion total; $1 billion per disaster; 1.72% of spending
• South Carolina: $1.3 billion total; $181 million per disaster; 1.14% of spending
• Georgia: $1.6 billion total; $272 million per disaster; 0.79% of spending

Nationally, FEMA obligations accounted for an average of 1.19% of state spending during the period — a relatively small share on paper, but one that represents billions of dollars when disaster strikes.

Looking Ahead

For residents like Council, the stakes are personal. He worries about proposals to scale back federal disaster aid as costs continue to climb.

“Our state and local governments aren’t financially equipped for that burden,” Council said. “We need reforms that get help out faster, not a system that leaves communities behind.”

With hurricane season entering its peak and Helene’s anniversary approaching on Sept. 27, North Carolina faces rising risks, depleted reserves and a future where rebuilding could get harder — and more expensive.