Infrastructure & Environment

Who Pays for Superstorm Sandy?

States don’t just want money to rebuild -- they want money to make far-reaching changes to infrastructure too.
by | January 2013

It was perhaps prophetic that big storms served as bookends to the nation’s 2012 political campaign season. Hurricane Isaac delayed the opening of the GOP convention in Tampa, Fla., in late August, and forced the Democrats to cancel the outdoor event closing their convention in Charlotte, N.C. Then, as campaigns entered the final stretch in late October, along came Superstorm Sandy, cutting a swath almost a thousand miles wide across 16 states.

With the exception of Hurricane Katrina seven years ago, Sandy inflicted more damage than any natural disaster in U.S. history. Just in the New York region alone, early cost estimates put the destruction at more than $50 billion.

In its wake, we are left with two questions: Who will pay the bill to restore and rebuild, and how will we do it so we can mitigate damage from the inevitable storms in the future? Gov. Andrew Cuomo, like a true New Yorker, shouldered his way to the head of the line in setting a price tag of at least $30 billion in an ambitious request for federal disaster aid for the city and state.

New Jersey was a bit more circumspect. “The governor of New York made a big splash with his numbers,” State Treasurer Andrew Sidamon-Eristoff said a couple of days after Cuomo’s announcement. “I want to be sure that when we offer up numbers here from New Jersey, that they’re well informed, well substantiated, well documented and well thought out.”

His governor, Chris Christie, who for three years had been pressing for reducing and capping taxes in the state, acknowledged that Sandy would require tax increases -- at least in the shore towns that sustained the most damage. Seven other states, from North Carolina to New Hampshire, are likely to ask for federal funding as well.

New York, New Jersey and Connecticut ultimately agreed on a joint request for $82 billion in relief. It came at an inopportune time in Washington, however, as the White House and Congress tried to mold a solution to the looming fiscal crisis. Fortunately, the Federal Emergency Management Agency has about $12 billion on hand, but that will only cover the down payment on the final tab from Sandy. In all, the feds ended up paying $120 billion for hurricanes Katrina and Rita.

Early in December, the administration asked Congress for $60.4 billion in emergency aid. The Senate, where Louisiana’s Mary Landrieu chairs the relevant appropriations subcommittee, is expected to be sympathetic to the states. But in the House, there will be more demands for details and more questions, especially about the mammoth federal flood insurance program, which insures almost 6 million homes in flood-prone areas and has lost money in four of the past eight years.

Critics in both parties point out that a relatively small slice of covered properties account for a big hunk of annual claims because homeowners insist on rebuilding in the same vulnerable locations while ignoring best design and building practices.

That raises the second question of how we should rebuild. Gov. Cuomo’s proposal in general terms calls for funding that would make significant changes in the region’s infrastructure for disseminating power and fuel supplies. In other words, he wants to do it smart, looking ahead to the next natural disaster.

While laudable, Cuomo’s proposal has to be done right, and even The New York Times chided the governor for prematurely and unilaterally pushing out his plan instead of collaborating with Gov. Christie and Connecticut Gov. Dannel Malloy on a regional package with carefully detailed needs. It is questionable whether “Congress will want to underwrite far-reaching changes to New York’s infrastructure, changes that go well beyond relief, repair and restoration,” the Times noted. “New York and New Jersey cannot expect a whole new stimulus package in the name of Hurricane Sandy.”

That’s probably true. But it forces the larger question of what to do about the monster at the door. We’ve been in denial about climate change, on how to reverse it and how to prepare for its future effects. To its great credit, California in particular refuses to stick its head in the sand and continues to take action that more states -- and Washington -- should emulate.

Possible answers involve a lot more than money. How do we organize the effort politically and administratively? How do we encourage experimentation? How do we reform public policies and programs to eliminate the same patterns of destructive behavior? And how do we change the traditional mindset about what we can and cannot afford, regarding issues like protecting wetlands, burying power lines, promoting alternative energy and so on?

Granted, this is not the best time to ask these questions, but there probably isn’t a good time. Even though most political leaders have hardly been talking about it, polls now show that more than two-thirds of Americans agree that global warming is affecting the weather in the United States. That’s a promising start.

Peter Harkness
Peter Harkness  |  Founder, Publisher Emeritus
pharkness@governing.com  | 

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