Tuesday, August 23, 2016

Will the pie explode again?

President Obama is slated to arrive in Baton Rouge this afternoon to survey flood damage and talk about recovery efforts.  We're still in the process of gathering data right now, but certainly there's going to be plenty of work to do.
While the final numbers won't be known for some time, Gov. John Bel Edwards' office has estimated 60,646 houses were damaged and 30,000 people rescued; other people escaped on their own. FEMA says 109,398 people or households have applied for housing help, and 25,000 National Flood Insurance Program claims have been filed. The American Red Cross called it the worst natural disaster since Hurricane Sandy struck New Jersey in 2012.

Now a new analysis offers another set of numbers. Ezra Boyd of Mandeville, who holds a Ph.D. in geography from LSU and runs the website DisasterMap.net, said Monday (Aug. 22) that as many as 188,729 occupied houses and 507,495 people -- 11 percent of the state's population -- were "affected" by the flood.
Last week, the Advocate reported the estimated cost of the damage at $20 billion. The same analysis suggests that "far fewer" than 50 percent of the homes affected by the flood were insured. Here's why that's a problem.
The federal disaster declaration triggers assistance for those whose homes and businesses have been damaged or displaced. Those who don't have flood insurance can still qualify for grants up to $33,000 for repairs. Temporary housing assistance will also become available
That's not going to cover rebuilding (and mandatory elevation) expenses in, dare we say, most cases. Unless more money is found (and we mean a lot more money) a regional economic recovery isn't likely to happen at all.. much less take only one year as this LSU economist seems to say
It could take a full year for southeast Louisiana to recover from horrific flood damage sustained during last week's historic rain event, according to one of the state's most trusted economists.

“You can count certain things (right now), such as the number of homes that were flooded, business that were flooded, public facilities such as schools that may have been flooded … then you start asking, ‘what are the real issues that are going to be coming over the next year?’” said economist and professor Jim Richardson to LSU University Relations.

Richardson, also a member of the state's Revenue Estimating Conference, said recovery expenses could generate a boost to local economies in the first year.

He predicted businesses would bounce back the quickest.

“Businesses, for the most part, will get back up and running quickly," he said. "Perhaps not some small businesses in areas badly hit like Denham Springs … but national chains will have resources and additional dollar amounts to get (going again).”
That seems pretty optimistic considering everything we've learned over the past decade in New Orleans. (Are we really even "recovered" now?  That's a different post.)  Furthermore, Richardson appears to be describing a consumer driven "recovery" where flood victims have access to the funds and credit necessary to do the consuming. Will they, though? There are problems. First among these problems is, Louisiana's congressional delegation sucks.
Louisiana's delegation could find itself seeking hundreds of millions of dollars for unmet needs just a few years after several of its members spurned such requests in the aftermath of Superstorm Sandy in 2012. And the delegation, which has few senior members, will be calling for cash from a tight-fisted Republican Congress during an exceptionally heated election season that will end with at least two and possibly three of its members leaving Capitol Hill.
The second thing is, Congress itself also sucks.
In major disasters, the assistance offered under the Stafford Act, which provides funds to both individuals and local government agencies to cover some of their costs, is often only one part of the equation. As of Friday afternoon, FEMA had already approved more than $7 million in individual assistance, which includes money for housing and other needs.

The rest is provided through supplemental funding from Congress, which dedicates money through programs like Community Development Block Grants to meet additional needs.

That extra money is going to be needed to cover costs that aren't met by insurance and to provide for other needs, such as providing vouchers to contractors who can gut houses.

But its availability is dependent on the willingness of lawmakers to go along with the plan, something that's hardly a sure thing.

For just one example of the gridlock in Congress, take the ongoing fight over funding to combat the spread of the Zika virus. In February, the White House requested $1.9 billion to battle the mosquito-born virus, which is present in Florida and could threaten other states, but fights over provisions tacked onto the bill have left it in limbo.
Thirdly... did we mention that our delegation sucks? Because they suck in specific ways that might cause others to have no sympathy with their appeals for help given their own behavior
Call it logrolling or one hand washing the other, a generally recognized fact in Washington is that if you want something for your district, it pays to agree to the same thing for another guy’s district.

That point may have been lost on three Louisiana congressmen when they voted against a $50.5-billion relief package for the victims of Superstorm Sandy. The 2012 storm ravaged coastal communities in New Jersey and New York. Now they’re in the position of needing the same sort of aid for their own state. How will that play out?

The three lawmakers, all Republicans, are Rep. Steve Scalise (currently the House majority whip); Bill Cassidy, who moved up to the Senate last year; and John Fleming. They’re all likely exemplars of another Washington truism: fiscal responsibility is great, until it’s your own district that’s getting fiscally hammered.
Despite so much cheery crap you may have read over the years about how the New Orleans economy "bucked the trend" during the recession because it had "resilience" and because hipster entrepreneurs showed up to make apps and open juice bars, the actual recovery.. such as it was.. depended on billions of dollars worth of federal spending. This meant FEMA reimbursement, new flood control projects, and hundreds of millions of dollars in community block grants.   
In the aftermath of Katrina, the federal government gave New Orleans a $411 million pot of CDBG disaster money. Designed by the U.S. Department of Housing and Urban Development as “flexible grants to help cities, counties, and states recover from Presidentially declared disasters, especially in low-income areas,” such money comes with relatively few restrictions beyond guidelines that projects must “principally” benefit areas or groups wherein a majority of people live in households with low-to-moderate incomes. In New Orleans, with a median income of $37,079, that means funded projects must principally benefit households with an annual income between $18,500 and $42,000.
When Ray Nagin told us about "this economic pie that's getting ready to explode" in New Orleans, he knew the federal stimulus was coming.  We can have a separate discussion about whether the CDBG money really did "principally benefit" people with low-to-moderate incomes. (It didn't. But, again, that's another post.)  But we can say that it did stimulate the economic activity we typically associate with Post-K "recovery."  If the political will isn't there to, pardon the image, make it rain again, none of that other stuff is going to happen this time.

Here is a letter Governor Edwards submitted to the President today. In it he asks for, among other things, these items:

A reduction in the state's cost share for damages from 25% to 10%

$125 million for the Army Corps of Engineers in order to complete the Comite River diversion

Expedited emergency relief highway funding

A waiver of the state's $100 million annual obligation to pay for federal hurricane protection systems. (A big deal of granted)

And, finally, an as-yet unspecified amount in CDBG-DR funds.  This one is the real key and the one that will have the hardest time fighting its way through Congress. But if we want to make the pie explode again, that's how it will happen.

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