New Congressional Deal Could Unlock More Money for Mitigation Projects Before Disasters Strike

Congress is close to passing legislation that would establish a new way for the president to direct money toward mitigation projects that are meant to help communities around the U.S. better withstand natural disasters such as floods, hurricanes and wildfires.

The bill, however, no longer contains language included in an earlier version that laid out clearer cut terms for making deposits in a special pre-disaster mitigation account, leaving some observers uncertain how much investment in preventative measures it will actually yield.

“It’s watered down,” Carlos Martín, a senior fellow in the Metropolitan Housing and Communities Policy Center at the Urban Institute, said as he discussed the mitigation aspects of the legislation. “You’re not saying, as a national policy, that we’re going to be funding mitigation.”

Martín describes the bill as “a step sideways.”

Other experts view the legislation as largely positive.

Forbes Tompkins, who oversees a resilient infrastructure policy portfolio at The Pew Charitable Trusts, said if the recently worked out deal is passed, the bill “will be a great example of Congress not letting perfect be the enemy of good.”

“There’s a lot of great stuff in there,” he added. “It has the potential to really be this landmark piece of legislation that allows communities to really get ahead of the next storm.”

The Disaster Recovery Reform Act, or DRRA, was attached to a Federal Aviation Administration reauthorization package that House and Senate lawmakers agreed to over the weekend. A House vote on the package is expected this week, but the timing of a Senate vote is less certain, Roll Call reported on Tuesday.

The DRRA bill delves into a host of disaster-related issues, with local and state advocates giving both plaudits and raising concerns about elements of the legislation.

Tompkins praised provisions aimed at strengthening building codes. The National League of Cities applauded language that would impose new limitations on federal clawbacks of funding from localities after disasters. And state floodplain managers are concerned about a section that would allow governors to seek exemptions from certain restrictions on how disaster funding can be used.

But a part of the bill that has drawn significant attention focuses on funding for pre-disaster hazard mitigation activities—such as buying out property owners in floodplains, installing utility poles that can withstand extreme winds, or thinning out brush that could fuel wildfires.

Spending on mitigation is widely viewed as a way to reduce the damage and recovery costs that natural disasters cause. An oft-cited statistic is that for every $1 spent on mitigation, $4 or more is saved in future disaster recovery expenses.

"We know that taking action ahead of time ultimately saves lives and saves dollars, rather than reacting after a disaster has occurred,” said Carolyn Berndt, program director for energy, environment and natural resources for the National League of Cities.

U.S. Rep. Bill Shuster, the Pennsylvania Republican who chairs the House Transportation and Infrastructure Committee, in an editorial published Monday in Investor’s Business Daily, said it is important lawmakers move swiftly to pass the bill.

“Federal disaster programs are too reactive,” Shuster’s article said, noting that the House has passed the DRRA twice since December, but that the legislation has not previously cleared the Senate.

“We wait for disaster to strike and then try to clean up afterward, often rebuilding our homes, communities and infrastructure exactly the way they were before,” he added. “Even when the way things were before may have been insufficient, inefficient or ineffective.”

“A ‘may,’ not a ‘shall.’”

In its current form, the DRRA says the president “may” set aside funding for pre-disaster hazard mitigation equal to an amount up to 6 percent of estimated total spending on seven disaster grant programs.

This money would be set aside from FEMA’s Disaster Relief Fund, the nation’s primary account for covering disaster costs. To be eligible for the pre-disaster funding, states would need to have had a major disaster declaration in the past seven years.

On average, the U.S. spends around $9 billion annually on disaster relief, according to Martín. That figure can be much higher in years when there are extensive disaster costs that require special appropriations. But 6 percent of $9 billion would be $540 million.

The main program FEMA currently runs to provide states with pre-disaster mitigation aid—the Pre-Disaster Mitigation Grant Program—had $235 million to distribute in grants during fiscal 2018.

There’s no guarantee though that states are on the cusp of gaining access to a windfall of federal pre-disaster mitigation cash. That’s because the wording in the current iteration of the DRRA bill leaves it up to the president and the administration to decide how much of the 6 percent to set aside for mitigation spending.

In contrast, an earlier draft included more explicit language. The earlier version said the president “shall” establish a specific Treasury account for pre-disaster mitigation spending and that the federal government “shall” deposit an amount equal to 6 percent of spending on the slate of recovery programs for disasters.

“The money is a ‘may,’ not a ‘shall.’ The president may grant this money,” said Larry Larson, a senior policy advisor with the Association of State Floodplain Managers. “We think the 6 percent is good, it’s not clear to us if it will ever be funded.” Larson also noted that whatever funding the president may allot would come from the Disaster Relief Fund. “It’s not really new money,” he said.

Dennis Harper, recovery division administrator for Iowa Homeland Security and Emergency Management, says his state has historically used Pre-Disaster Mitigation Grant Program dollars to augment funding from FEMA’s Hazard Mitigation Grant Program, a separate program designed to aid communities after they’re hit by disasters.

A common way the state has spent the money is acquiring residential property located in flood zones.

“More funding would mean we’d be able to reach out more into those types of projects that are more difficult to fund,” he said. An example, according to Harper, might be upgrades to electrical substations or water or wastewater facilities, that are “high value, but high cost.”

Harper raised the possibility that the DRRA could effectively put federal pre-disaster mitigation grant funding “on steroids.” But he also highlighted the lack of any fixed standard for how much funding the legislation will provide each year as a cause for concern.

“Anything that throws question into how much funding is going to be available is a hindrance,” he added. “You need some assurance in the program that it’s going to be there year to year.”

“Some of these projects take three to five years of planning before you execute,” Harper added.

Duplication, Deobligation

Looking elsewhere in the bill, the Association of State Floodplain Managers is raising a red flag over a section that has to do with “duplication of benefits”—a prohibition in the nation’s disaster recovery laws that blocks money from multiple federal agencies going to the same expense.

The DRRA would give governors an option to ask the president for a waiver to these restrictions. “We’re very opposed to that,” Larson said. The group feels so strongly about the issue that its held off backing the bill even though it supports other parts of the legislation.

A fear that the floodplain managers have is that governors will seek to redirect funds to expensive Army Corps of Engineers projects, such as levees and dikes, while forgoing other projects that might be more cost effective, but lack the same political appeal.

“All of the sudden you’ve sucked out all the money so that it’s not available for anything else,” Larson added.

Meanwhile, Yucel Ors, program director for public safety and crime prevention for the National League of Cities, said the group is pleased to see language in the bill that would place new limits on FEMA’s ability to “deobligate,” or take back, money that local governments were provided, and spent.

Ors said this can happen when FEMA initially approves an expense in the aftermath of a disaster but then later determines it did not meet certain audit standards and asks for it back.

“Coming back five or six years later, trying to take millions of dollars away is very problematic,” he said.

Big Investment Earlier this Year

The DRRA comes after Congress earlier this year approved legislation that directed the Department of Housing and Urban Development to put at least $12 billion of a $28 billion allotment of disaster recovery grant funding toward awards for mitigation activities. The agency later determined it would increase that total, making nearly $16 billion of the money available for mitigation grants.

Marion Mollegen McFadden is vice president of public policy at Enterprise Community Partners, an organization that works on issues related to affordable housing and community development. She said she believes there is a shift going on when it comes to how lawmakers on Capitol Hill view spending on mitigation.

“We've gotten to the point where it strikes people as good common sense not to throw good money after bad,” said McFadden, who used to serve as deputy assistant secretary for HUD’s grant programs. “We're very excited to see that Congress is now being generous in looking at the needs of communities before disasters strike.”