The Foundry

“Show me the money!” is one of the most memorable lines from a movie—Jerry Maguire—in the last twenty years. Coincidentally, that movie came out in 1996, which was a reelection year for President Bill Clinton. Not coincidentally, President Clinton in fact showed them the money in 1996 when the Federal Emergency Management Agency (FEMA) issued more disaster declarations—157—than any year before or after. In “States: Stop Subsidizing FEMA Waste and Manage Your Own Local Disasters,” we detail the tendency over the last sixteen years to define disaster down so that the vast majority of FEMA declarations fail to meet the Stafford Act requirement of severity and magnitude. It is all about the money.

Specifically, with the FEMA declaration comes federal funds to pay for at least 75% of the costs of the disaster. When many of these disasters are of the scale that states and localities historically had handled without federal involvement for the first 205 years of America’s history, it means that most states (29) subsidize the majority of disasters declarations that get approved in a minority of states (21). We need to return to the pre-nationalization of disasters era when each state took care of itself and we reserved federal funds and assets for nationally catastrophic disasters.

In a recent example, Indiana experienced a severe storm in August. Surprisingly, FEMA denied Indiana’s request for a declaration because Indiana had not experienced enough damage. Not to be deterred, Indiana is “urging anyone who sustained damages caused by severe weather, including wind and flooding, from August 4 to August 9 to report it” so that it can appeal FEMA’s denial and get the federal funds. Who can blame Indiana when it has only received 26 FEMA declarations since 1993 compared to less populated (read: fewer taxpayers) states like Oklahoma, Nevada, and Colorado that have received 90, 53, and 52 FEMA declarations over the same period of time. Indiana isn’t alone as most states have figured out the system and do whatever they can to push their costs onto taxpayers in other states.

A more rational approach would be for states to simply keep the portion of their federal taxes that go to fund FEMA and fund disasters directly. Otherwise, states will keep shouting “Show me the money!” out of one side of their mouth as they claim that “all disasters are local (except the money)” out of the other side.