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 atwww.taxfoundation.org
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.
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.
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).
- 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.
- Following the flooding, Iowa sought to leverage a range of both state and federal funding sources to expedite recovery efforts.
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.