FEMA's Plan to Make States Pay More for Disasters

It's one of the many ideas and practices that Craig Fugate, the agency's outgoing leader, hopes the Trump administration will adopt. Among the others: rescuing pets.
by | December 8, 2016
A man and his dog after being rescued from his flooded home during Hurricane Isaac in 2012. (AP/David J. Phillip)

During his eight years leading the Federal Emergency Management Agency (FEMA), Craig Fugate has made changes both big and small to how the federal government -- and, by extension, states and localities -- respond to disasters.

He required the agency’s websites to be mobile-friendly so survivors can get the information they need if all they have left is the clothes they're wearing and belongings they could carry. He made sure all new hires -- even those who review grants or work in human relations -- understand they can be deployed to the field when a major disaster hits. He even championed policies to let emergency responders bring dogs and other family pets along during evacuations.

Now, Fugate is pushing one more change, one that could fundamentally alter the federal government’s relationship with states and localities when disaster strikes. He wants to impose “disaster deductibles” on states as a way to control the spiraling cost of them for the federal government as well as incentivize states to prevent and prepare for disasters.

“The current system is basically all-or-nothing,” Fugate told Governing. “It treats all states the same. It doesn’t recognize states that do things to buy down future risk, and it doesn’t do anything to provide incentives to states [to mitigate disaster risks].”

Fugate and FEMA first raised the issue and asked for comments in January. Now that the agency has collected those responses, FEMA plans to issue a more detailed proposal by the end of the year. That would leave any final decision to Fugate’s successor in the Donald Trump administration, who has yet to be named.

In a nearly hour-long interview with Governing last week, Fugate, who began his career as a volunteer firefighter and led Florida’s emergency management agency before joining FEMA in 2009, discussed the disaster deductibles, along with changes FEMA made under his watch that he hopes his successor in the Trump administration continues.

Below are the highlights from that conversation.

Disaster deductibles

Even before Fugate took over, critics complained that disaster relief costs the federal government too much money. There have been 13 disasters since 2000 that have each cost FEMA more than $500 million, and FEMA’s disaster-relief budget now exceeds $5 billion a year -- more than double what it was at the beginning of the Obama administration.

Some federal watchdogs, including FEMA’s inspector general and the Government Accountability Office (GAO), have suggested that FEMA raise the threshold for the amount of damage required before a state can qualify for a presidential disaster declaration. The damage thresholds depend on a state’s population: This year, the rate is $1.43 per resident. The watchdog agencies have suggested doubling or even tripling that rate so states would have to cover the full costs of more disasters on their own.

Currently, when states get a presidential disaster declaration, the federal government reimburses them for 75 percent of their costs for qualifying expenses.

But Fugate wants states to chip in a certain amount of money -- a “deductible” -- before they can get a presidential declaration. FEMA would be able to reduce those deductibles for states that took steps to lower the costs of disasters by, for example, imposing more stringent building codes in coastal areas or thinning forests where wildfires are likely.

“It’s sort of like for a homeowner’s policy. If you have an alarm system, you get a discount. If you have a fire extinguisher in the kitchen, you get a discount. We would be looking at giving discounts based on what states do,” he said.

The way Fugate envisions it, states would get credit for their preventative measures, even if they didn’t apply to the current disaster facing a state. So a governor who wanted assistance for flooding would still get credit if his or her state took steps to minimize the threat of forest fires.

States were standoffish after FEMA first unveiled the deductible concept in January. They pointed out that they already have an incentive to minimize disaster costs because they pay a quarter of them. The National Association of Counties outright opposed the idea.

Fugate recognizes the opposition, but he encouraged state and local officials not to dismiss the underlying concerns that the federal government has increasingly shouldered more of the cost of disaster relief.

“You may not like what I propose,” he recalls telling a gathering of state emergency management officials recently, “but you need to come to a response to this ... If not this, what do you propose?”

The controversy is tightly tied to a long-running dispute with states over how FEMA determines what qualifies for a presidential disaster declaration. The 1998 Stafford Act outlines a number of considerations the agency is supposed to use, but in practice, it uses only one: the per-capita expenses. The GAO has criticized the practice, and the Stafford Act itself prohibits awarding disaster declarations “solely by virtue of an arithmetic formula or sliding scale based on income or population.”

Fugate, though, defended the heavy reliance on the per-capita factor, even as he acknowledged that it's a crude measure.

“It’s easy, and people understand it. There’s nothing magical about it,” he said. “By looking at each state the same way, there seems to be fairness there.”

‘Who the hell are you planning for?’

One recurring theme of Fugate’s tenure has been the need for emergency management officials to plan for circumstances that would stretch their resources, not just ones that they could handle easily.

Take the issue of evacuating pets. By some accounts, more than half the people who refused to evacuate during Hurricane Katrina stayed because they wanted to be with their pets. The ensuing outrage prompted Congress to pass a law in 2006 requiring emergency management officials to plan for pet evacuations too. To Fugate, the idea that rescuers at one point were instructed not to take pets with them showed how out of touch disaster planning had become.

“Sometimes when you deal with monolithic federal bureaucracies," he said, "easy, simple things become stupid. The reality is, that pet’s part of the family. People will not evacuate. Why make people make those hard and sometimes bad decisions?”

Attitudes have changed in the decade since Katrina. During Hurricane Matthew this year, search and rescue teams helped families evacuate with their pets -- as long as the animals weren’t dangerous. They even picked up a few abandoned dogs, some of them swimming in floodwaters, and turned them over to local humane societies.

But it wasn’t just pets that were treated as an afterthought when Fugate first came to FEMA.

Emergency planners often focused their attention on serving able-bodied adults. In fact, FEMA required planners to address the “easy” issues in their main plans and all of the “harder” cases separately. That meant officials were making separate contingency plans for helping seniors, children and people with disabilities.

“My question was, 'Who the hell are you planning for? That’s over half your population,'” said Fugate.

But during his eight-year tenure, he said emergency management agencies have made big strides, in particular, with disabled populations. As FEMA made disaster planning for people with disabilities a priority, Fugate said most states also came around, and many now exceed what the federal government itself is doing.

Craig Fugate, right, at the National Hurricane Center, talking about the status of Hurricane Joaquin in 2015. (AP/Lynne Sladky)

Managing for the mission

Fugate traces much of FEMA’s improvement to paying attention to basic management practices.

“We found that in too many cases, we were taking shortcuts or working in crisis mode,” he said. “Some of this basic management stuff that may not seem sexy to you, because it ain’t about a disaster response, is critical.”

One of the first things Fugate noticed, for example, was that not all of the job descriptions for employees spelled out that they could be deployed to a disaster area. Fugate made sure that changed, requiring all new hires to "sign a statement that goes in their personnel file that acknowledges that they are, 24 hours a day, 7 days a week, on call to support the nation in a time of crisis,” he said.

“No exceptions. Everybody is going to be an emergency manager.”

Over the years, that policy paid off. It, of course, gave FEMA more people to dispatch for major events like Hurricane Sandy in 2012. Many employees also appreciated the opportunity to serve in a time of need, and when they returned to their regular jobs afterward, they had a better sense of how their work fit into the agency’s mission.

Fugate also instituted a formal two-week onboarding process for employees that also sought to teach new hires about how they supported the agency’s mission. Standardizing roles and credentials made it easier to determine what tasks to assign to FEMA employees when they arrived at a disaster scene.

Another major shift was in telework. Promoting the idea that people could work remotely allowed the agency to save money on pricey office space in Washington, D.C., at a time of shrinking budgets, and the shift also prepared employees to do their work remotely if they were dispatched to disaster relief.

Fugate has also pushed to make the process of interacting with FEMA more intuitive. Often, survivors are asked for the same information over and over again after a disaster, and they’re left to try to navigate myriad disaster-related programs on their own.

“When there’s a disaster, when people are having the worst day of their life, they don’t need instructions on how to get help. They just need to make contact,” he said. “They shouldn’t have to figure out FEMA. We should figure out what our programs could do for them.”

Preparing for change

Fugate, a Democrat who has been the head of FEMA for the entire Obama administration, will be stepping down from the role this January. It’s a decision, he said, that he made before he knew the results of the presidential election.

So far, he's made no other plans after that.

“In our world, you’ve got to stay focused on the right now. Earthquakes don’t have a season. Disasters are unpredictable,” he said. “When you start thinking about what you’re doing next, you forget what you’re supposed to be doing right now.”

As Fugate prepares to turn the helm of FEMA to a new team, he said his focus has been on developing materials for the new administration that will explain why FEMA under his watch has done things the way they have.

"[Political] transitions tend to be the most vulnerable time for outside actors to disrupt or interfere with our system of peaceful transfer of governance."

But even after nearly a decade in the federal government, Fugate is a firm believer that the system works best when states lead in times of disaster.

“Disasters are a state-led, federally supported event,” he said. “It may be seductively easy to say we could take over [a disaster response] at the federal level. It’s the worst thing we could do. If the federal government takes on a national role, we become that single point of failure in a large-scale crisis.”