The federal government's FY 2026 formally began on October 1, 2025. To date, Congress has only completed work on three of the 12 annual appropriations bills, meaning that only Agriculture, Veteran's Affairs, and the Legislative Branch have full year funding. The rest of the government is currently operating under a Continuing Resolution that expires on January 30, 2026. 

On January 5, 2026, the House and Senate appropriations committees released a three bill appropriations "minibus" that included three bills that would fund the 1) Department of Justice, Department of Commerce, key science agencies and other related entities; 2) Department of Energy and water development; and 3) Department of Interior, Environmental Protection Agency, and other related agencies through September 30, the end of FY 2026. 

On Thursday, January 9, the U.S. House of Representatives advanced the three appropriations bills with bipartisan support (397-28), setting the stage for consideration in the Senate. If signed into law by the president, that will leave Congress with six remaining appropriations bills to pass by the January 30 deadline in order to avert another government shutdown.

The minibus includes a number of provisions that address key priorities for local governments, including:

• Department of Justice:
  • Funds programs that enable local governments to enhance public safety, including $86 million to fund drug courts, $32 million for veteran's treatment courts, and $185 million for the Comprehensive Opioid Stimulant and Substance Abuse Disorder Program.
  • Invests in local government law enforcement capacity building with $346 million in funding for the Byrne Justice Assistance Grants, $253 million for the Community-Oriented Policing Services Hiring Program, and $35 million for the Justice and Mental Health Collaboration Program. 
• Economic Development Administration, which provides $400 million in funding to support state and local projects.
• Appalachian Regional Commission, which allocates $200 million in funding to support economic development in the Appalachian region. 
• Environmental Protection Agency, which provides $1.64 billion for the Clean Water State Revolving Fund and $1.13 billion for the Drinking Water State Revolving Fund.
• Department of the Interior, which provides full funding for the Payments in Lieu of Taxes program.
• Department of the Interior, which maintains the current structure for federal wildfire response
• U.S. Department of Agriculture, which allocates $4.9 billion to the Forest Service for wildland fire suppression 

The race is now underway to finalize remaining spending bills before the current CR expires on January 30 to avoid another government shutdown.