Key Contacts
EPA FY 2026 Outlook: Staffing, Policy, and Shutdown Effects
EPA’s first quarter of the 2026 Fiscal Year was dominated by the longest government shutdown in U.S. history, with reopening of the Agency occurring just before the typical end-of-the-calendar-year slow down. The remainder of Fiscal Year 2026 will be governed in no small measure by the ongoing appropriations process, including the threat of yet another shutdown at the end of January. 2026 may be a year of uncertainty and unintended consequences for both the Agency and the regulated community.
Impact of the Shutdown
While the prolonged shutdown impacted both EPA’s mission and personnel, one of the early indicators of these impacts will be the annual Brownfields grant application process. Every year EPA makes hundreds of millions of dollars in Brownfields funding available to local governments and nonprofits organizations to assess and cleanup eligible contaminated sites. Typically, applications for this funding are due sometime in November, but the shutdown forced EPA to move that deadline to January 28, 2026. The uncertainty and confusion surrounding the updated deadline may lead some potential applicants to miss the deadline or “sit out” this grant cycle.
Moreover, applying for a Brownfield grant is time and resource intensive, and many small local governments rely on technical assistance provided by EPA contractors to write a successful grant application and to identify the sometimes-subtle year-to-year changes in the grant application criteria and ensure their application addresses those changes. However, the government shutdown meant that many government contractors were also closed for business; hence, many small local governments and non-profits were not able to get the support they need to prepare a successful grant application. The combination of these factors could have a significant impact in the quantity and quality of Brownfield applications submitted in the 2026 grant cycle. Manko Gold Katcher & Fox can assist eligible entities navigate the uncertainties of the Brownfield grant process, including reviewing candidate properties for legal compliance, identifying technical assistance providers, and reviewing the complete application for legal sufficiency.
Feeling the Effects of Reduction in Personnel
While the final numbers are not yet in, EPA has incurred a significant reduction in staff, and – because the incentives to retire were particularly attractive to those closer to retirement age – a disproportionate number of those departing are senior, experienced staff. While EPA may claim that the reduction in staff will not result in loss of institutional knowledge, concerns in the regulated community focus on EPA’s ability to timely respond to inquiries, for example responding to requests for comfort letters or prospective purchaser agreements. Many redevelopment projects are extremely time sensitive, and a delay in getting the necessary EPA approvals can spell the difference between a successful project or a “walk away” by a frustrated potential purchaser.
Another area impacted by personnel loss is in permit drafting or review. While the Trump Administration is committed to streamlining and expediting permit reviews, this may prove difficult with a reduced and inexperienced team. The Agency can always get a permit “out the door” by a certain date, but a poorly drafted permit (or one with an inadequate record to support it) is ripe for a legal challenge, and the time saved by expediting the review can easily be dwarfed by the time lost in extended litigation. Permit applicants can improve their chances of obtaining a defensible permit in a timely fashion by communicating early and often with the EPA permit project team, and supporting the process by providing necessary technical support for the administrative record to ensure the permit can survive legal challenge.
Enforcement Policy – Clear Intentions – Unforeseen Consequences?
On December 5, 2025, EPA issued its “Compliance First” memo, which deemphasizes formal enforcement – especially civil litigation – in favor of an expeditious return to compliance. This has led some to speculate that state environmental agencies would begin to take the lead on environmental enforcement, but this may not be possible. Many states get a significant portion of their environmental enforcement budget from EPA, and early indications are that these states can expect to see a significant reduction in this funding. So, there appears to be no doubt that the regulated community can expect a reduction in Federal and state environmental enforcement, but does that mean there are no concerns on the enforcement horizon? There is some evidence to the contrary.
A review of hiring websites demonstrates that environmental public interest groups have been aggressively hiring since the beginning of 2025. They have particularly focused on litigation attorneys and have been scooping up experienced professionals separating from EPA. Moreover, during the Biden Administration many of these groups took advantage of generous grant opportunities to stock up on a myriad of technical devices (e.g., flare cameras, fence-line monitors, and drones) that allow them to conduct off-site monitoring of regulated entities to a degree here-to-fore unknown. Many environmental statutes include citizen suit provisions that allow citizens groups to directly enforce these statutes, but only if they first give notice to the applicable governmental agencies, and those agencies decline to enforce. These community-based groups can be aggressive in their demands, including attorney fees, and are not limited by enforcement discretion policies that can temper governmental approaches to enforcement. Will these “private attorneys general” pick up the enforcement “slack” left by EPA and the states? This remains to be seen, but if public interest environmental groups begin to aggressively occupy the space vacated by governmental agencies, the regulated community may feel as if they have escaped the frying pan only to land in the fire.
