By James Soderling, CivicLex · September 1, 2026

During Council’s August 25th Budget, Finance, and Economic Development Committee, Councilmembers reviewed how the city might have to navigate changes to federal grant priorities.

According to the city’s Commissioner of Housing Advocacy and Community Development Charlie Lanter, Lexington’s annual grant portfolio exceeded $150 million during the pandemic due to emergency funding. The city’s budget is returning to “a more normal or typical state” of approximately $50-$60 million, though changes at the federal level could disrupt how the city plans to spend it. 

A presentation at the meeting explained how federal priorities began shifting in 2025 when agencies started monitoring grants for compliance with the current administration’s priorities.  

The presentation also discussed a proposed policy change that would give current and future federal agencies more authority to award and rescind grants based on changing priorities.

In a follow-up email to CivicLex, Lanter explained why this change concerns him the most: “When a nonprofit business or local government receives a federal grant, we build a program around that commitment… We simply cannot responsibly do those things if an executed federal grant agreement can later be terminated because the political priorities of the federal government have changed.”

The Urban County Government has not lost any federal grant funding or been passed over for it to date, the presentation said, but the city faced a “close call.” In 2025, a major Substance Abuse and Mental Health Services Administration grant was pulled but was quickly restored after public outcry.

“One thing you could always count on is once you enter that federal contract, the federal government was usually good for it as far as the money’s concerned,” Lanter said. “Now that’s not so sure.” 

There are even uncertainties looming within legislative wins. 

The federal ROAD to Housing Act, which passed this summer, incentivizes communities that take intentional steps towards housing development. Lexington is ahead of the curve of other cities on that front, Lanter said. 

The city has already eliminated parking minimums and implemented density bonuses, which are necessary elements to receive this type of funding in the future. However, Congress did not put any money into the ROAD to Housing Act, so cities everywhere are kept in limbo as they wait for the programs within the act to get funded, Lanter explained. 

Looking ahead, these shifting priorities mean the city's primary challenge is about the unpredictability happening at the federal level. As Lanter expressed to CivicLex, "so far, that uncertainty has not caused us to make significant changes to how we budget or plan, but it does make long-term planning considerably more difficult."