With disaster costs rising, states don’t know what they’re spending

With disaster costs rising, states don’t know what they’re spending
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Hurricane Florence, which made landfall on the Eastern Seaboard on Sept. 14, flooded counties in both Carolinas and was the rainiest weather event ever recorded in Wilmington, North Carolina.

On the other side of the country, the Mendocino Complex fire — which began in late July and still was not 100 percent contained when Florence struck the East Coast seven weeks later — was the largest in California's history. And in June, a flash flood in Ellicott City, Maryland, destroyed businesses, homes and infrastructure, some of which still were being rebuilt after a similar event two years earlier.

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From coast to coast, disasters are becoming more severe, expensive and frequent. Congress has approved at least $140 billion for 2017’s hurricanes and wildfires, and the bills from this year’s events continue to pile up.

That money comes from across the federal government, from the Federal Emergency Management Agency (FEMA) to the departments of Housing and Urban Development, Health and Human Services, and Defense. But federal funds are just one part of the complex system for dealing with disasters in this country. State and local governments play key roles, as do the private sector, philanthropies and faith-based groups. As mayor of Charleston, South Carolina, I saw this interplay firsthand when Hurricane Hugo hit in September 1989 as we dealt with evacuations, emergency shelters, and eventually the rebuilding of our roads, bridges and neighborhoods.

That interconnectedness is an important consideration as the federal government, seeing more and more money going out the door for disaster spending, is deciding how to more effectively manage these rising costs. The ultimate decision is sure to affect the relationship between federal and state disaster spending and, in turn, spending by local governments, because most federal funds flow through the states to counties, cities and towns.

But there’s something missing in the conversation about recalibrating the share of disaster aid spent by the federal government and the states. According to research by The Pew Charitable Trusts, states aren’t tracking what they actually spend preparing for, responding to, and rebuilding from disasters. That means that policymakers in Washington can’t know how policies intended to curb federal costs would actually play out. Would the policies just shift costs from one level of government to the other — or would they, instead, make real headway toward reducing the overall price tag for the nation by incentivizing investments that reduce the impact of future disasters?

Make no mistake: Tracking state spending is challenging. For one thing, it’s spread out over many entities. From my time as mayor, I know that disaster assistance involved state offices from emergency management to natural resources, and from social services to agriculture. Pew found the same, for example, with Florida, which reported disaster spending by 12 different agencies. And tracking this spending is made more complicated by the fact that disasters don’t happen every year, or on a predictable schedule, so they don’t get the type of sustained scrutiny that other fiscal issues do.  

But I also know that these are challenges worth overcoming, because not knowing what states and local governments are spending on disasters has major consequences.

First, as someone who oversaw a $181 million annual budget in Charleston, I know how essential it is to stay on top of what you’re spending. A more complete picture of disaster spending would help states and localities make strategic decisions about how and where to invest in cost-saving mitigation activities, such as the $239 million that Charleston is spending on drainage improvements to alleviate flooding.

Second, changes being proposed and/or implemented by Congress, FEMA and others could have different effects on states based on the makeup of a state’s spending. For example, some states are investing in programs that mirror federal initiatives to assist local governments after disasters, such as Wisconsin’s Disaster Fund program — an approach that FEMA Administrator Brock Long has said he wants to incentivize.

And finally, Congress has passed legislation allowing FEMA to increase the share it pays for disaster costs to states that invest in mitigation — which research says can save an average of $6 for every $1 spent. That could include spending that states reported to Pew, such as $49 million for flood projects in Iowa and $36 million for earthquake retrofits in Oregon. Without more comprehensive tracking, we can’t know whether state spending on mitigation meets federal goals to increase these investments at all levels of government.

Something can be done to close this information gap. Comparable disaster spending data from all 50 states, which would require a national coordinated effort, would be useful for federal decision-makers. But states and local governments also can take steps on their own to improve the tracking of disaster spending. The Ohio Emergency Management Agency, for example, has worked with the state Office of Budget and Management to better track state-level investments in disasters by building on existing reporting structures to record expenditures on events that don’t rise to the level of qualifying for federal assistance.

Regardless of how it’s done, we must get better at tracking state and local spending on disaster mitigation and relief. In this era of more frequent, severe and costly events, knowing who’s spending what is more important than ever.

Joseph P. Riley Jr. was mayor of Charleston, South Carolina, from December 1975 to January 2016 and is a distinguished fellow with The Pew Charitable Trusts.