New study shows how states manage the rising costs of natural disasters

As natural disasters grow in severity and frequency, new research from Pew, designed to inform U.S. lawmakers, is spelling out how states are managing the rising costs.

In the study, Pew identified several strategies in all 50 states and Washington, D.C.

According to the study, the District of Columbia and 46 states have a disaster account to cover costs incurred by state and local governments.

But while a disaster fund is common – some even have more than one — among the majority of states, the contributions to those accounts vary dramatically from state to state.

For example, new contributions in Rhode Island and Nebraska for fiscal years 2017-19 totaled $250,000. Meanwhile, New York reserved $200 million in fiscal year 2018, according to Pew.

Use and management of those funds can also vary from state to state, raising complex questions about carrying balances for future use and other revenue sources.

At the start of the 2018 fiscal year, Florida appropriated more than $15 million to its Emergency Management, Preparedness, and Assistance Trust Fund, according to the study.

Another frequently used method is the use of supplemental appropriations. In the event of a budget shortfall, state legislatures can make budget decisions to move funds to areas of need. But because most state legislatures do not meet year-round, that option may require a special session or a designated committee – as is the case presently in Florida. While the ongoing global pandemic continues to cripple Florida’s economy, speculation about a Special Session this summer looms.

The study underscores the change in posture by federal lawmakers, who have increasingly called on states to more responsibly fund disaster and preparedness. In the midst of the pandemic, many have criticized Gov. Ron DeSantis for waiting for federal aid rather than addressing the state’s own budget.

In 2018, then-acting FEMA Administrator Peter Gaynor described the pace of federal spending as “unsustainable” in regard to natural disasters.

“The only way we can survive as a nation is to set aside pre-disaster money and build state and local capacity,” Gaynor said.