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State & Local Funding Resources


This section provides information on state-level funding sources that may be available during the recovery process. Information about this funding, as well as the availability and extent of this funding, varies by state, and thus this section does not provide specific funding information for all states. Instead, it presents a general scenario for funding availability at the state level. Also provided in this section, by is contact information for the Emergency Management offices in each state, so that you may contact your state's office directly to inquire about the programs that are specific to your state. Additionally, this section provides case studies that examine states' responses to various disasters.

In the event that a Presidential Declaration is made for a disaster, a state becomes eligible for Federal Emergency Management Agency (FEMA) Public Assistance (PA) cost-sharing grants. In many cases, these grants require state match funds of 25%, although in cases of extreme devastation the cost-sharing requirement may be waived or reduced. States typically have a Disaster Emergency Fund, which gets regularly appropriated by the state government, that can be used to finance recovery efforts and to match grant dollars provided by the Federal government, per program requirements. The amount that these funds contain varies by state; states that are more vulnerable to disasters may place greater amounts of money in their fund than states that have not typically been victim to many disasters. In most cases, if this funding is not enough, or the state requires additional recovery funding that cannot be acquired from other sources, the Governor (or another similar state government official) has the authority to allocate additional state funding for recovery assistance.

For some states, the availability of state funding sources ends with the Disaster Emergency Fund. For others, however, additional resources may also be available for the recovery process, including additional funding from different state departments (ex. the state Department of Transportation) for specific types of projects. For example, as directed by the Minnesota Statutes Chapter 162.06 and 162.12, the Minnesota Department of Transportation administers disaster assistance funds to state-aid roads and streets. In other cases, there may also be funding available from the affected counties or other localities, local private organizations, and non-profit agencies. Additionally, in the aftermath of a large disaster, some states opt to create a new funding program specifically targeted towards raising and allocating money for the recovery process.

In the event that a Governor's Declaration is made, but not a Presidential Declaration, disaster recovery funding comes first from the affected locality, as well as the area's respective county/parish. If these resources have been exhausted, then funding may also be provided via the aforementioned state Disaster Emergency Fund. Other state level funding sources may be available from various state departments, as well as from federal agencies (for example, the Federal Highway Administration (FHWA) Emergency Relief (ER) funds do not require a Presidential Declaration), depending on the type of recovery projects being undertaken. Additional funding and resources may also be sought out from private organizations and non-profit agencies.

State and Local Bond Initiatives

State and local bond initiatives are one of the major ways State and local governments, as well as special districts, can finance public projects—by borrowing from investors, usually (but not always) within their own jurisdictions.

State and local bond issues, as defined in the Tax Reform Act of 1986, are exempt from Federal income taxes, as well as State income taxes, in many States, as long as they provide no more than 10 percent benefit to private parties and no more than 5 percent of the proceeds or $5 million are used for loans to private parties. Thus, they are a relatively popular vehicle, especially for project upgrades that are not eligible for FEMA’s PA Grant Program. These bonds do not require a Presidentially declared disaster.

They are legally termed public activity, traditional government purpose, and essential purpose bonds. These public purpose bonds are used for roads, streets, highways, sidewalks, libraries, and government buildings. Bond funding can be used by State and local entities to pay the match portion of public assistance projects, as well as upgrades. For more information, visit the Tax Foundation website  

Case Studies

These case studies highlight specific states' responses to a variety of disasters and highlight some best practices that have enabled these states to rebuild their transportation infrastructure. Each case study begins with a look at the disaster recovery plan or program implemented within the state, followed by a description of how the plan was executed and federal funds leveraged following a disaster.


Program Overview
The framework for the recovery process with regards to transportation systems and infrastructure in California can be found in ESF #3 and ESF #14 of California’s State Emergency Plan. These functions are to be headed by the State and Consumer Services Agency, and the Business, Transportation and Housing Agency, respectively, while drawing additional support from state agencies such as the Department of Transportation, and the Department of Housing and Community Development.
A variety of different funding sources are available at the state level for the recovery process following a disaster. A Disaster Response-Emergency Operation Account has been established in the Special Fund for Economic Uncertainties (California Government Code, Section 8690.6), which can be allocated to state agencies and state-requested local agencies by the Director of Finance, as reimbursement for disaster response operation costs. At the beginning of each fiscal year, $1 million is placed into the account, though additional funding can be added by the Director as necessary. Additionally, there is also a Disaster Assistance Fund (California Government Code 8690.25), which is a special fund within the State Treasury that is continually appropriated and available for use by agencies during the recovery process. This fund also includes a subsidiary account called the Earthquake Emergency Investigations Account, which covers expenses incurred by earthquake damage investigations.
The California Transportation Commission’s (CTC) Resolution G-11 also provides flexibility in its funding for the Department of Transportation in the event of a disaster. The Resolution allows the Department of Transportation to allocate its funds as necessary to correct and repair emergency damages cause by severe storms, flooding, earthquakes, etc. The purpose of this Resolution is to allow the Department to begin the recovery process as soon as possible, without waiting for allocation approval at the next CTC meeting. This Resolution becomes active whenever an event places people or property in jeopardy, causes or threatens to cause closure of transportation access, or causes either an excessive increase in delay or congestion, or an excessive increase in the necessary distances traveled.
In the long run, State Highway Protection Program (SHOPP) funding, which is allocated every four years, may also be used to repair transportation systems. The funding is split between proposed projects and reservation funding for each year. Given the nature of emergency response funding, the majority of the money allocated to emergency response is in the form of reservation funding, which can be spent as needed by the Department. The SHOPP plan for fiscal years 2006/2007 through 2009/2010 allocates $112 million for proposed projects, while reserving an additional $239 million for expected emergencies and disasters.

Case Study
In the March and April of 2006, California experienced a series of intense storms, landslides, and flooding in more than 15 counties. As a result of these storms, many roads and highways were severely damaged, particularly as a result of land and mudslides. For example, the storms rendered the slopes along Route 5 in Shasta County unstable, and damaged the embankment slope on Route 49 in Nevada County. Additionally, damage to Route 101 in Humboldt County necessitated the construction of a soldier pile wall to stabilize an active slide area, and damage to Route 96 in Siskiyou County required the repair of a failed slope. Although some projects ended up receiving assistance Federal Emergency Relief (ER) funds, the California Department of Transportation was poised to spend as much of its SHOPP 2006 reservation funding as necessary to fund the permanent restoration of these areas. In total, these projects, as well as several other related projects, would have cost the Department approximately $22 million. Over the following years, additional restoration projects, as a result of these storms, were also funded by SHOPP. For example, over $2.5 million was spent in 2008 on repairs and modifications to highways that were damaged in 2006.

Best Practice/Highlight
Flexible state transportation funding provisions and the availability of state funding enable California to expedite permanent restoration projects.


Program Overview
The state of Iowa’s Recovery Plan contains an appendix that provides a framework for transportation recovery post-disaster. Annex V, which concerns transportation infrastructure assistance, provides an overview of the responsibilities for the Department of Transportation following a disaster, and the support network that is in place for the Department. At the state level, the Department may seek assistance from the Iowa Homeland Security and Emergency Management Division, and at the federal level, from FEMA, US DOT, and FHWA. The plan specifies that no funding is allocated at the state level for transportation infrastructure assistance and that the state will administer and support any federally based assistance programs. As such, it is the responsibility of the Iowa Department of Transportation to prepare and submit applications for damage relief funding to the federal government.
Case Study
Between May and August of 2008, the state of Iowa experienced a series of severe natural disasters, including floods, tornadoes, and other severe thunderstorms storms. These disasters affected more than 85 of Iowa's 99 counties, and accrued approximately $53 million in damages to public transportation infrastructure. Across the state, 20 highways, 24 state roads, and more than 1000 other secondary roads, had to be closed for repair.
In the aftermath of these storms, the Iowa's Governor Culver developed the I-Jobs initiative, which was focused on strengthening the state’s economy and rebuilding local infrastructure following the 2008 storms. The I-Jobs Bonding Funds is a three year, $830 million program that provides funding to public improvements, disaster recovery, transportation, rebuilding universities, environment and water quality, housing needs and telecommunications and renewable energy. Of the $830 million budget, $118.5 is to be used for competitive disaster recovery grants, and $46.5 million for targeted disaster rebuilding.
The Rebuild Iowa Office has noted the need to repair all of the damaged roads, bridges, and other transportation infrastructure within the state. They plan to fund these repairs through grants from the US Department of Transportation, FEMA, and I-Jobs bonding funds. Additional funding for infrastructure projects may also be possible through the Community Disaster Grant Program, which was created in February 2009, by Governor Culver, in response to the flooding and storms. The program is a $22 million disaster relief program that provides grants of $2,000 or more to cities and counties to projects that are not being otherwise funded (by federal or non-federal sources).
Best Practices
  1. Addressing recovery as part of emergency preparedness, Iowa has a State Recovery Plan with an appendix that provides a framework for transportation recovery post-disaster, including transportation infrastructure assistance.
  2. Following the flooding, Iowa sought to leverage a range of both state and federal funding sources to expedite recovery efforts.


Program Overview
Long-term transportation recovery in the state of Louisiana is outlined in ESF #3 and #14 in the state’s Emergency Operations Plan. ESF #3 details plans for public works recovery and engineering post-disaster, giving the Louisiana Department of Transportation and Development primary responsibility for the delegation and completion all related tasks. Tasks covered by this ESF include: debris removal, repairs to public facilities, and a focus on flood control and mitigation. To accomplish these tasks, the Department of Transportation and Development can draw support from a variety of state agencies, such as the Louisiana National Guard, the Office of the Governor, the Department of Health and Hospitals and the Department of Natural Resources. ESF#14 concerns community recovery, mitigation, and economic stabilization in the long-term. The Governor’s Office of Homeland Security and Emergency Management (GOHSEP) and the Department of Economic Development are given primary responsibility for the emergency support functions of this section, which include developing long-term recovery strategies for affected areas and acting as a liaison between the local, parish, state and federal entities involved in the recovery process. GOHSEP and the Department of Economic Development are supported by various other state agencies, including the Department of Transportation and Development, the Office of the Governor—Office of Financial Institutions, the Department of Revenue, as well as select volunteer organizations.
Some funding for these operations is available from the state. Once a Governor’s Declaration has been made, the governor can allocate state funding, with approval from the Interim Emergency Board, in addition to the regularly appropriated disaster funds that are determined annually by the president of the Senate, the speaker of the House, and the chairmen of the House Appropriations Committee and the Senate Finance Committee. A State Emergency Relief Fund was also established by the Homeland Security and Emergency Assistance Act (Louisiana Revised Statutes, Title 29, Chapter 6).
Aside from the framework set forth in the state’s Emergency Operations Plan, the Louisiana Recovery Authority (LRA) was also established as an aid to disaster recovery in the aftermath of Hurricane Katrina. The LRA is comprised of a 17-member board, 13 of whom are individuals selected by the Governor and confirmed by the Senate, in addition to the speaker and speaker pro tempore of the State House of Representatives and president and president pro tempore of the State Senate. The group is charged with creating and implementing state goals and visions for recovery by recommending policies, plans of action, and resource allocation for recovery programs and services, and ensuring that the state rebuilds safer, stronger, and smarter. The group is responsible for providing match funding for FEMA public assistance grants, as well as allocating FEMA funding and grants to local parishes. They also play a significant role in lobbying for recovery money from federal sources, such as HUD’s Community Development Block Grants.
Case Study
Over the past 5 years, the state of Louisiana has experienced several destructive hurricanes, particularly Hurricanes Katrina and Rita. Both of these hurricanes resulted in significant damages to transportation systems within the state, and pushed forth a need not only to reconstruct previous systems, but to rethink, redesign, and rebuild infrastructure to be stronger in the event of future disasters.
Following the two hurricanes, the Louisiana Department of Transportation headed various recovery projects for the state’s highways, bridges, and ports. An initial assessment showed that 142 moveable bridges in the state were affected by storms and that nearly 20% were damaged severely enough that they were closed for a period of time to marine and/or vehicular traffic. Many of these bridges were damages to the point where they were eligible to receive federal funding, with a projected total repair cost of $15 million. Additional damages were also sustained by state and local highways, and other local roads; Ramps on Interstate Highway 10 were submerged in water from flooding, U.S. Highway 90, which ran between New Orleans and Pascagoula, Mississippi was essentially destroyed, and an 8-mile long section of the Twin Span bridge, which connected New Orleans to Slidell, Louisiana, collapsed into Lake Ponchartrain.
Since these disasters, the Louisiana Department of Transportation has also engaged in a series of hurricane flood prevention initiatives, which seek to protect a similar magnitude of damage from occurring in the event of a future disaster. In 2007, the state allocated $1.1 billion in general surplus funds to the department for highway maintenance, repairs, and improvements. Of that funding, $53 million is being put towards nine different hurricane flood protection programs across the state. Other similar projects also include a project to replace LA 1, which has been sinking over time, and would be extremely vulnerable to flooding in the event of a hurricane. As such, the state is preemptively replacing the highway with the 18-mile long LA 1 bridge.
Best Practice
Taking advantage of the opportunity to mitigate against future flooding, the state chose to replace a vulnerable road with more resilient infrastructure.


Program Overview
The Kansas Response Plan, written by the Kansas Division of Emergency Management (KDEM), delineates the state’s recovery process for transportation systems in ESF #3 and #14. ESF #3, which targets public works and engineering, establishes the Kansas Department of Transportation, in conjunction with the KDEM, as the primary agencies responsible for carrying out all required functions, with support from other state, as well as private, agencies. These tasks include clearing all debris from transportation routes, assessing infrastructure integrity and damage, and tasking personnel for all response and recovery responsibilities. While local governments are responsible for local infrastructure, if they do not possess sufficient resources, the state can offer them aid. ESF #14 focuses on the permanent restoration of infrastructure, housing, and the local economy, as well as mitigation measures for future disasters. The tasks prescribed in this ESF are to be led by the KDEM, with support from other state agencies.
Funding for recovery efforts is available from the State Emergency Fund, provided that a Governor’s Declaration has been made. While the maximum allotment of this fund is set at $10 million, exceptions can, and have, been made. For example, following the Greensburg tornado in May 2007, the State Finance Council was given the option to allocate up to $25 million in state funds to the recovery process.
Case Study
On May 4, 2007, the city of Greensburg, Kansas was struck by an F-5 class tornado that wiped away 90% of the structures within the town. While significant damage was not sustained by many local roads, with the exception of US Hwy 54, debris was a large problem for the city and its transportation routes. Over 300,000 cubic yards of debris were removed with the help of the Kansas Department of Transportation, as well as the Kansas Guard, and various volunteer groups. The Kansas DOT provided equipment, including 65 dump trucks, 20 heavy equipment loaders, and 5 bulldozers, and was responsible for organizing the clean up. The debris removal process was funded through a FEMA cost-sharing grant, in which FEMA covered 75% of the costs, while the city/state was responsible for the remaining 25%.
The Department also took charge of restoring U.S. 54, which provides an essential link between Greenburg and the rest of the state. The highway was closed for one month following the tornado. Though the road is now open again, the city has plans not just to restore the area to its pre-disaster state, but to transform and rebuild the city—a vision that includes an improved U.S. 54 corridor that would pass though the town, and provide residents with greater access to the road, and provide future benefits to the community. Moreover, it is being argued that now is the opportune time for such a change, as the city can be rebuilt around the new road; people and homes will not have to be displaced. The cost estimate for this project is approximately $90,000, and though funding source have not yet been established, city authorities seek to obtain funds from USDA Rural Development, as well as the Kansas DOT.
Best Practice
Greensburg is one of the most prominent examples of a community using long-term community recovery to implement a new vision for the community as it rebuilds.


Program Overview
In Wisconsin there are several funding programs, depending on the severity of the disaster and the type of assistance required. For example, the Wisconsin Disaster Fund, administered by Wisconsin Emergency Management, provides cost sharing grants for up to 70% of the cost of a project, in the event that federal disaster assistance is denied or the criteria for a Presidential Declaration are not met. Community Development Block Grants are also available from the state for through the Housing Emergency Assistance Program and the Public Facilities Emergency Assistance Program, which are administered by the state Department of Commerce. Additional funding is also available for housing assistance through the Wisconsin Housing and Economic Development Authority.
For damage to transportation systems, the state DOT also offers assistance via their Flood Damage Aid Program. This program covers the restoration of roadways (not including state highway roads) damaged by flooding, as well as mitigation repairs. The program requires local match funding.
Case Study
As a result of severe rains in June 2008, the Kickapoo River in Gays Mills, WI rose 20.4 feet above base flood elevation, flooding more than 90% of the village, and severely damaging more than 50% of downtown homes. The damages sustained by the village were so large that there has been talk of a voluntary partial relocation of the village to one of several nearby locations along State Route 131.
In conjunction with FEMA, the village of Gays Mills has developed a Long-Term Community Recovery Plan, in coordination with the ESF #14 field operation. The plan contains several transportation projects, including the creation of a new “Main Street” with slowed traffic, bicycle lanes, as well as additional landscaping and lighting, to bring aesthetic value to the area and attract commerce. Similar improvements were also proposed for a different section of State Route 131, as well as a project to make the downtown area of the village more pedestrian friendly (i.e. the construction of parking areas and cross walks, and installation of street furnishings such as benches and trash receptacles). These three projects are estimated to cost around $430,000, and are to be potentially funded through the Economic Development Authority.
Best Practice
Gays Mills highlights the cross-cutting nature of transportation by bringing together two often-separated areas of recovery, transportation and economic development.