Tornadoes, floods deliver blow to state budgets
Sunday, June 26, 2011
The tornadoes and floods that pummeled much of the South and Midwest also have dealt a serious blow to struggling state budgets, potentially forcing new cuts to education and other services to offset hundreds of millions of dollars in disaster aid.
Most state budgets were still reeling from the economy when a huge outbreak of tornadoes marched across the South in late April, followed in May by more twisters and flooding that extended into the Midwest.
“The disaster could not have come at much worse of a time from a budget standpoint,” said David Perry, Alabama’s finance director. The budget lawmakers adopted included “relatively steep cuts for many state agencies, and the tornado outbreak only adds to our budget pressure going forward.”
The first of the cuts have already hit home in Missouri, where students will be saddled with greater college costs, and grants for domestic violence shelters have been trimmed, among other things.
Missouri and Alabama — where about 400 people were killed by twisters this year — could be forced to make a total of about $150 million in cuts because of the violent weather.
Georgia has tapped an emergency fund. Tennessee is relying on its reserves, too. And storm costs in Oklahoma will only add to the state’s multimillion-dollar disaster debt accumulated over several years of natural disasters.
After a major catastrophe, the federal government often shells out billions of dollars to clean up debris, rebuild roads and buildings and help families left homeless get back on their feet. For most disaster costs, the federal government pays 75 percent, leaving state and local governments to cover the rest.
Yet when disaster costs climb to nine or 10 digits, the state’s comparatively small share can still present a staggering bill.
In Missouri, lawmakers passed a $23 billion annual budget about the same time that the Army Corps of Engineers blew up a levee to ease flooding pressure along the Mississippi River. The resulting deluge affected an estimated 130,000 acres of fertile farmland and rural homes. A couple of weeks later, the nation’s deadliest tornado in decades tore through Joplin, killing 156 people and destroying about 8,000 homes and businesses.
Missouri’s budget had set aside $1 million for disaster aid, but Gov. Jay Nixon quickly pledged $50 million for the Joplin tornado and southeast Missouri flooding, offsetting that with cuts to other government programs. The biggest chunk came from higher education, which already was slated for a 5.5 percent cut in the coming school year.
Nixon deepened that cut to 7 or 8 percent, depending on the institution, and also reduced the amount of money lawmakers had budgeted for scholarships.
For the University of Missouri system, that means its state aid for the 2011-12 school year will be 11 percent lower than in 2001, despite an enrollment increase of 39 percent during the past decade.
Eric Woods, student president of the Columbia campus, acknowledged the need for disaster assistance, but bemoaned that students now have to shoulder the burden for Missouri’s “crummy luck” with disasters.
“I think when you’re making a state chose between rebuilding after several natural disasters or funding their schools, there’s something not quite right about it,” said Woods, a senior majoring in political science, history and religious studies.
Among other things, Nixon also trimmed the budget for domestic violence grants by 15 percent, essentially continuing a cut from the previous year. That comes as the number of abused women and children seeking shelter the Lafayette House in Joplin has more than doubled since the May 22 tornado, said Louise Secker, the organizations’ director of community services.
Missouri and Alabama hope the federal government will agree to cover a greaterthan-usual share of the cost for rebuilding public facilities and removing debris. But that may not be enough to avoid painful budget decisions in Alabama, which has about $20 million available for disaster aid in the next fiscal year but expects this year’s tornadoes to cost the state $80 million to $120 million over the next several years.
“Obviously, we’ll have to either cut other areas to come up with enough money to pay for the state’s share, or we’ll have to come up with some new revenue sources,” Perry said.
The situation is other states is less dire, but still troublesome.
When lawmakers return to the Georgia Capitol next year, they will need to find an additional $5.9 million to cover the state’s remaining share of disaster costs from tornadoes. Georgia’s governor already has tapped $2.6 million from an emergency fund.
Tennessee, which has been trying to rebuild its reserves, plans to dip into them to cover part of the $71 million budgeted for tornado and flooding aid, said Lola Potter, a spokeswoman for the state Department of Finance and Administration.
Some Southern states, including Louisiana and Mississippi, created special disaster-reserve funds after hurricanes Katrina and Rita in 2005. Those accounts have helped ease the strain of paying for this year’s storm damage.
Even for a state with a budget surplus — North Dakota — disaster relief spending has been high. After several floods this year including the Souris River in Minot, which forced thousands of residents to evacuate their homes, state flood-fighting expenses are expected to exhaust a $23.5 million disaster relief fund that was supposed to last until June 2013.
Because rebuilding can take years, disaster bills often go unpaid for long periods in some states. For the second straight year, budget problems led Kansas to delay a couple of million dollars’ worth of payments to electric cooperatives for storm damage.
In Oklahoma, where the federal government has declared more than two dozen emergencies or disasters since 2007, the state has a $30 million backlog of unpaid reimbursements to cities, counties and rural electric utilities. At the same time, its emergency fund has just $1.6 million, and no new money was appropriated this year.
Because of a spate of blizzards, floods, twisters and other storms, Oklahoma will likely incur an additional $5 million in disaster debt.
“We’re probably further behind, but keep in mind where we compare to other states in terms of disasters,” said Albert Ashwood, director of the Oklahoma Department of Emergency Management. said. “When you start getting four, five or six disasters every year, it’s easier to use it up.”
Associated Press writers Shannon McCaffrey in Atlanta; Emily Wagster Pettus in Jackson, Miss.; Sean Murphy in Oklahoma City; Melinda Deslatte in Baton Rouge, La.; Dale Wetzel in Bismarck, N.D., and Lucas Johnson in Nashville, Tenn., contributed to this report.
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