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Governments Need to Start Preparing Budgets for Climate Change

It's important to get the money in order before the next disaster strikes. A few places already are.

Pie chart climate change
When the subject is resiliency, what we usually think about are environmental issues, disaster preparedness and emergency response capacity. In its Climate Resilience Toolkit, for example, the National Oceanic and Atmospheric Administration defines resiliency as “the capacity of a community, business or natural environment to prevent, withstand, respond to and recover from a disruption.” I don’t think we readily make the connection to how deeply that capacity is connected to financial management.

That point was driven home to me when I talked with Long Beach, Calif., City Manager Patrick West a few months ago. I was interested in how he saw the ever-expanding concept of resiliency, and I was intrigued by the extent to which the city’s financial policies take into account not only economic cycles but also the need to be prepared for catastrophes like earthquakes, tsunamis, terrorism and public health crises.

At the time, I thought these policies unusually wise and forward thinking. Now, in light of late summer’s devastating storms in Texas,  Florida and Puerto Rico, they seem even more so. In the wake of Hurricane Harvey, for example, Houston Mayor Sylvester Turner proposed an emergency one-year property tax increase to cover costs including overtime for first responders, debris removal, equipment replacement and repairs to city facilities. Debris removal alone is estimated to cost $230 million, and while 75 percent of the cost could be reimbursed by the Federal Emergency Management Agency (FEMA), that process could take years. “The challenge we all face right now is being at the front end of this years-long process to establish what is going to be reimbursable,” Kelly Dowe, Houston’s chief financial officer, told the Houston Press

Dowe’s right to focus on that. The Sarasota Herald-Tribune, reporting on the costs faced by Florida communities after Irma’s devastation in September, noted that after Hurricane Charley in 2004, Charlotte County spent nearly five years “battling with FEMA” over reimbursements eventually totaling $55 million.

For me, these struggles underline the growing need for more governments to build disaster resiliency into their fiscal policies. Climate change is bringing more frequent and more extreme weather events. Residents expect a city to put things back to rights as quickly as possible. They want debris cleaned up and services restored. These are not costs that will respond well to the time-honored practice of kicking the can down the road.

The politics can be tricky, of course. In a 2009 political science paper, Andrew Healy and Neil Malhotra found that while every dollar spent on disaster preparedness is worth about $15 in future damage mitigation, voters do not seem to reward politicians for spending on disaster preparedness. Long Beach, where a disastrous 1933 earthquake has not been forgotten, seems to be betting that things are changing in that regard. When the next disaster strikes and people have a chance to examine what happened, Patrick West wants them to find that the city was prepared and responded well.

Mark Funkhouser, a former publisher of Governing and former mayor of Kansas City, is president of Funkhouse & Associates, an independent consulting firm. He can be reached at
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