Helene recovery money slow to be approved for Western NC

Western North Carolinians need bridges in more ways than one. Seven months after Tropical Storm Helene hit the region, many feel at a standstill. Federal money is in the pipeline, but may not arrive for months — or even years. State funding is coming in waves, but a focus on matching federal dollars leaves less for direct assistance. Philanthropy hasn’t been enough to fill the gap in Helene recovery.

Amidst this tense financial picture, local governments have two months to balance their budgets before June 30. The calculus is bleak.

Revenue is down. Towns missed out on the region’s peak tourism season and the spending that accompanies it. Destroyed homes means fewer people are paying property taxes. 

Expenses are up. Roads and bridges need to be repaired. Houses have to be rebuilt. Small businesses require support to stay in the black. People are looking for housing, food, mental health support and other services. 

“Some of these local governments have a $3 million budget and $4 million in debris removal,”  said Russ Harris, a board member of the North Carolina Association of Regional Councils of Government. “They can’t cash flow it.” 

Harris, who oversees seven southwestern North Carolina counties, said local governments are cutting to the bone and then hoping their “rainy day” funds can buoy them until state and federal money arrives. 

Even that won’t be enough to meet the $60 billion estimated need. 

The community recognizes that for the most part, said Nathan Ramsey, a former state legislator and current member of the North Carolina Association of Regional Councils of Government.

“I don’t think anyone is under the impression that the individuals and businesses are going to be made whole,” Ramsey said. “We know there’s going to be loss. There’s going to be significant loss. It’s a disaster. That is what it is.” 

‘Constant tension’ of Helene recovery

It may seem like nothing is happening, but the state is “moving as fast as is wise and appropriate,” assured Hugh Blackwell, a state House Republican who represents Burke County.

Blackwell, who serves on the House Appropriations Committee, said they’re in the first week of reviewing the state Senate’s budget proposal, which was presented in mid-April. He expects the House budget to be complete by the end of the month. He couldn’t say what exactly his chamber’s budget would include for Helene. 

The Senate budget, however, includes $700 million for Helene recovery. Approximately $25 million is appropriated, to be distributed to the governor’s recovery office, the state’s housing recovery office, the UNC Board of Governors and the state’s community college system. 

The remaining money will sit in the Helene Disaster Recovery Fund until the state decides how to spend it. Most likely, it will be used as matching funds to secure federal recovery grants. 

Some, particularly on the Democratic side of the aisle, have expressed a desire to spend more now instead of waiting for the notoriously slow and bureaucratic federal government. 

“There’s this constant tension between what you want to do and what is sort of contingent on what the feds do, and that if you don’t get it right, then maybe you forfeit the chance to get the money from the feds,” Blackwell said. “But then what does that mean in terms of delaying action here at home?”

Blackwell thinks Western North Carolinians understand the state’s strategy: drafting and passing different recovery bills as legislators learn more and identify funding sources while the budget process continues on. 

Since Helene hit, the legislature has dedicated $1.4 billion to Helene recovery across four bills. If the Senate’s budget proposal becomes law, the contribution will exceed $2.1 billion. 

But that’s not much when compared to the need.

Balancing the budget 

Boone Fire Chief Jimmy Isaacs expects the city to incur about $6 million in damages, not including debris removal. So far, Boone has only been reimbursed for about $600,000 in debris removal from the state, he said. 

Isaacs thinks the Federal Emergency Management Agency is moving slower than in previous disasters that have impacted the region. 

“Probably one of the things that is hurting us is just the volume of damage and the large geographical area that the damage is spread over,” he said. 

In the meantime, local governments foot the bill. 

In Asheville, the city has spent about $24 million on Helene recovery. The city has about $16 million more under contract. FEMA, however, has only reimbursed $10 million. 

The city’s also maxed out the amount of money it can borrow ($5 million) through the federal Community Disaster Loan Program, Asheville Mayor Esther Manheimer said.

Manheimer says she has no choice but to raise property taxes. The city has to replenish its reserves, which were used for initial recovery needs. Additionally, she wants to offer employees a cost-of-living adjustment after their “above and beyond” work in the past year. 

She also has to take a scalpel to the city budget. A year of annual retirement contributions. A half-million dollar affordable housing trust contribution. Strategic partnership grants. All cut. Hiring is frozen for all but critical recovery staff. With a pinch here and a pinch there, Manheimer said they may tighten their belts to the tune of $5 million.

Not another loan

The second Helene recovery package included $100 million in loans to local governments. Recipients have five years to repay them. 

That compares to about $600 million in actual local government cash flow loss, Ramsey said. 

In a perfect world, the state would provide grants, not loans, but legislators have been careful to not lose their spot in line for federal funding, Harris said.

“Hopefully you get your FEMA money, you pay it back, and you never incur the interest on that,” he said. “I think the loan piece has been scary for local governments, but it had to be a loan in order not to knock local governments out of getting FEMA money.” 

But finding grants is a struggle.

Some private organizations have tried to fill the gap. For example, Dogwood Health Trust, a private health foundation, has partnered with the governor’s office to grant over $70 million to small businesses impacted by Helene. 

However, $70 million is not much when compared to the overall $13 billion loss in business revenue, as highlighted by a recent NC Budget & Tax Center analysis, which found that in its Helene relief packages, the state prioritized infrastructure at the expense of economic and housing recovery. 

Navigating bureaucracy of Helene recovery

Federal money will come. But when and how much is anyone’s guess. 

For certain is $1.4 billion from the U.S. Housing and Urban Development’s disaster recovery Community Development Block Grants. 

Some FEMA public and individual assistance has arrived, too. 

But other federal agencies haven’t announced how much North Carolina will get from their American Relief Act of 2025 allocations. In some cases, recipients have to endure a competitive grant process to secure funding. 

For those who seek it,  it might take awhile to get federal assistance. 

“We know from storms that impacted eastern North Carolina several years ago that in some cases it was many years before they got repaid,” Ramsey said. 

In the meantime, local governments need a financial bridge. They’re turning to the state for help. 

“Right now, I’m screaming, begging,” Ramsey said. “Local governments have to adopt the budget by June 30, so that’s two months. And no offense to the feds, but nothing at the federal level is going to happen in the next two months that’s going to solve this problem.”

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