June marks the beginning of the Atlantic hurricane season. While 2014 was a relatively light year for storms, the last decade or so was not. And with more people moving to coastal areas and coastal areas becoming more vulnerable, taxpayer costs are only going to rise.

That’s why Taxpayers for Common Sense joined with other fiscal conservatives, environmental groups, consumer and housing advocates, and insurance interests to offer “Bracing for the Storm: How to Reform U.S. Disaster Policy to Prepare for a Riskier Future.” A product of SmarterSafer, the coalition formed by these groups, the report echoes many of the policy solutions TCS has promoted, because a number of policies have to change.

• An analysis by the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania found that the federal share of disaster costs has steadily increased from less than 30 percent in the wake of Hurricane Hugo in 1989 to more than 80 percent after SuperStorm Sandy in 2012. Easy access to federal cash after an event reduces incentives for states and localities to budget for mitigation and investments to reduce risk before disasters strike. Disaster assistance should be provided on a sliding scale with greater aid to states and communities that have planned and taken strides to reduce future risk.
• The federal flood insurance program is broken. It is $23 billion in debt to the U.S. Treasury and in 2014 took in only $3.6 billion in premiums. Flood maps that identify risk and dictate the premiums to be paid need to be updated and accurate. While premiums must be increased toward actuarial rates, there also need to be affordability provisions outside the rate structure that help lower income homeowners on a means-tested basis.
• Public infrastructure at the federal, state, and local level is largely self-insured by Uncle Sam. That doesn’t have to be the case. New York’s Metropolitan Transportation Authority has the world’s largest catastrophe bond in case of a disaster. Whether it is city hall or a state office building, state and local governments can insure infrastructure which reduces post-disaster costs.
• The U.S. Army Corps of Engineers constructs flood and storm damage reduction projects like levees and pumping sand on beaches. While these projects protect from even large storms, they serve to intensify development that is at risk from catastrophic events and seem to scoff at the notion of rising sea levels. These projects are cost-shared but after federal and state funds, there is often very little contribution from the locality. And size of the project is predicated on the value of the property being protected. So the more expensive properties get more federally subsidized protection.
• Post-disaster funding should be tracked so that taxpayers know that their investments are being used wisely to mitigate harm. This is not intended to be a “gotcha,” but a way to better understand where federal tax dollars are going and identify trends. Post-disaster funds are often large pots of money – witness the $16 billion in Community Development Block Grants provided post-Sandy. That is five times the annual level of spending the program gets nationally. There was a legislative battle over the Sandy funding. One way to reduce these skirmishes is to document examples of previous disaster funds being spent wisely and including provisions to ensure future funds will be as well.

While there is much to be done, some positive things are already happening. The House Transportation and Infrastructure Committee has shown an interest in reforming disaster policy, already passing legislation that represents first steps of reform. The Administration has also directed that in most cases federal investments will only be provided to structures that are built at least two feet above the “base flood elevation” (the level where there is a one percent chance of flooding in any given year). These are good first steps.

Disaster spending is a pay me now or pay me a lot later proposition. Funds need to be invested wisely and appropriately to reduce risk. And when inevitable disasters strike, rebuilding efforts must be designed to “pre-spond” to make the community and people less vulnerable to future disasters.