Update and Explainer on Government Shutdown

Federal Funding Update and Explainer on Government Shutdown Impacts to the Independent Living Program

Dear Independent Living Community,

As promised, we are writing to provide you with another update regarding federal funding and impacts of the government shutdown on the independent living program and the communities we serve.

Brief Budget Process Explanation

The federal budget process begins when the President submits a budget proposal to Congress, outlining funding priorities for the upcoming fiscal year. Congress then reviews, modifies, and passes budget resolutions and appropriations bills to allocate funding to federal agencies and programs. Finally, the President signs the bills into law, and agencies implement the budget under congressional oversight.

As of Midnight the morning of October 1 Congress and the President have not reached an agreement on the federal budget, and we are officially in a Government Shutdown.

Federal Grant Cycles Overview

The Independent Living Program has two-line items of appropriations of federal funding. We frequently refer to these line items as Part B and Part C funds in reference to the statutory authority in the Rehabilitation Act where the appropriations stem from.

Part B Funds are provided through each state to support and expand independent living services, as directed by each State Plan for Independent Living (SPIL). There are both CILs and SILCs that receive Part B funds.

Part C funds are direct awards from the Administration on Community Living to CILs. Long-standing formulas have determined how much each CIL gets directly from ACL.

Part B and Part C funds have different grant cycles.

Part B awards run alongside the federal fiscal year. Part B funds awarded for FY 2025 have already been distributed. For the next federal grant cycle, Federal Fiscal Year 2026, Part B awards were supposed to begin October 1. Those FY 2026 funds have not yet been appropriated by congress as a FY 2026 Federal Budget has not been passed.

Part C funds awarded for FY 2025 began on September 30, 2025, the last day of the federal fiscal year. Federal Fiscal Year 2026 funds have not yet been appropriated either, but since they would not be available until September 30, 2026, the impact of the current shutdown is less significant.

Impact on the Independent Living Program Grants

Part C Funding and Shutdown Impact

We are relieved to report that all Federal FY 2025 awards have been issued. Over the last several weeks NCIL had multiple meetings and calls with ACL. ACL was very responsive to our concerns and as a result, the funds were issued in the final hours before the deadline. Please see NCIL, APRIL and NASILC’s joint press release on the issue here. Fiscal Year 25 Part C grants should not be impacted by the government shutdown and CILs should be able to draw down their awards through PMS. The only exception to this is if your award is currently under a funding restriction due to compliance findings. If this applies to you ACL will be reaching out to you directly. If you have any issues accessing your funds, please contact Jessica Podesva immediately.

Part B Funding and Shutdown Impact

As of October 1, 2025, the FY 2026 federal grant cycle for Part B awards has not begun due to Congress’s failure to pass a federal budget. While FY 2025 Part B funds have already been distributed, the federal shutdown may impact SILCs and CILs that rely on FY 2026 Part B funding. The degree of impact will vary by state, depending on how each state chooses to respond. Historically, some states have stepped in to provide temporary funding, while others have experienced delays in awards and operations.

NCIL is here for you. We understand the uncertainty and disruption this situation may cause. We are committed to standing with organizations affected by the shutdown, amplifying the impact on our community to elected officials, and offering hands-on guidance, resources, and problem-solving support to those navigating these challenges.

If your SILC or CIL is impacted and/or has questions, please reach out to us. NCIL will continue to communicate with congressional offices to ensure they understand the real-world consequences of this delay and the urgent need to come to an agreement and pass the budget.

We also encourage SILCs and CILs within each state to come together — collectively and collaboratively — to assess the potential impact, communicate with your Designated State Entity and coordinate a unified response. Your voices are powerful, and your experiences are essential in shaping the advocacy efforts ahead.

Together, we will continue to fight for the funding, stability, and recognition our community deserves.

Please contact NCIL’s Director of Advocacy and Public Policy Jessica Podesva at jessica@ncil.org to share impact or if you have any questions or need any support. This is only the first communication regarding this issue. We will be providing resources and additional ways to act over the coming days and throughout the shutdown.