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FEMA’s disaster deductible proposal raises concern
Kirill Abbakumov   on Tuesday, May 30, 2017 at 12:00:00 am

The Federal Emergency Management Agency (FEMA) has recently announced a proposal to implement a “disaster deductible” that would require states to satisfy an insurance-like deductible before receiving Public Assistance funding from the federal government to repair and rebuild damaged infrastructure after major disasters. After receiving initial comments from stakeholders in 2016, FEMA released the second iteration of the proposal in January 2017 to solicit further feedback.

The state deductibles would range from a high of nearly $53 million for California to a low of $1 million for Alaska, Vermont, and Wyoming. FEMA claims that states could cut their deductibles and earn “credits” by adopting and enforcing activities that support readiness, preparation, mitigation, and resilience. That would include things like revising building codes in areas prone to flooding or reducing dense brush and invasive plant species where wildfires might take place.

The recognisable danger in the proposal is that it would potentially violate current federal law that requires the federal government to provide a minimum of a 75% contribution on all public assistance funding provided following a disaster. The proposal is unclear on whether there are deductible offsets for investments that local governments made, and whether states have the sole authority to determine which projects would, and would not, receive funding when state deductibles have not been satisfied.

The current disaster deductible proposal by FEMA raises serious concern for local governments. According to the Congressional Research Service, there have been 13 disasters since 2000 that have each cost FEMA more than $500 million, while the agency’s disaster relief budget now exceeds $5 billion.