Katrina fund helps Miss. with other disaster costs

By Emily Wagster Pettus/The Associated Press

JACKSON — Mississippi officials say the state budget is in good shape to survive the impact of this past spring’s tornadoes and river flooding.

The state still has tens of millions of dollars set aside from Hurricane Katrina recovery, and top lawmakers say that cash is providing a cushion that could help cover the recovery expenses from the latest natural disasters. It could be months before the tab is calculated.

Other states, including Missouri and Alabama, anticipate budget problems because of massive tornadoes that struck in recent months.

Mississippi Emergency Management Agency director Mike Womack said recovery from big disasters typically takes more than a single year, so the expenses are spread out over several budget cycles.

“We have some disasters that are four or five years old and there are still some projects that are not complete,” Womack said.

The state’s current fiscal year ends Thursday.

Mississippi has different pots of money that officials could dip into to help cover disaster recovery, if needed.

The state created a working cash stabilization fund, commonly called the rainy day fund, in the early 1990s. The Legislative Budget Office says the fund is projected to have a balance of about $190 million on June 30, the end of the current fiscal year; and a balance of about $87 million on June 30, 2012, the end of the next fiscal year.

Mississippi also has a disaster recovery fund that was created after Hurricane Katrina in 2005. The fund has a current balance of $103.4 million, according to the state Department of Finance and Administration.

Legislators are shifting $47.3 million from the recovery fund to MEMA to pay some expenses from past disasters. Legislators are using about $28 million from the disaster fund to pad the state’s general budget for fiscal 2012. That will leave just over $28 million in the fund, and legislators say they’re hoping to hold that in reserve to pad the fiscal 2013 budget.

Laura Hipp, a spokeswoman for Gov. Haley Barbour, said authorities are still assessing damage from this spring’s disasters.

“Areas of our state remain flooded, and state agencies are still in response mode in those communities impacted by the tornadoes and the flood,” Hipp said. “Therefore, it is too early to determine the total impact on agency budgets, though the Federal Emergency Management Agency will cover a portion of those costs. It is also too early to determine just how the state’s revenue will be impacted by agricultural losses, business interruption and other losses from these disasters.”

State Sen. Doug Davis, a Hernando Republican who chairs the appropriations committee, said he has asked state agencies such as the Department of Public Safety to calculate their expenses from the tornadoes and flooding so he can know whether they expect to ask for more money in January, when legislators return for their regular session. That would be midway through fiscal 2012.

“I’m optimistic they can make it through the first half of (fiscal) ’12, assuming we don’t have another disaster,” Davis said.

House Appropriations Committee Chairman Johnny Stringer, a Democrat from Montrose, said he’s trying to find out whether Mississippi still has some unspent federal stimulus money that could be used for disaster recovery, if needed.

“I’ve been on the end of a tornado before, and recovery doesn’t take a year. It takes years,” said Stringer, whose south Mississippi farm was hit in 2004. “I lost my shop and had damage to my house and my tractor and it just beat up all my equipment

MEMA’s Womack said each state has flexibility to handle federal and state cost-sharing for disasters however it wants.

Womack said individual assistance programs from FEMA are grants to households, a maximum of $30,200 per household for each disaster. He said anything having to do with housing – repair or rebuilding of a home, or rental assistance – is not subject to cost-sharing. But other expenses are subject to cost-sharing, including the replacement of appliances, replacement of vehicles, and medical and funeral expenses. He said in cases where cost-sharing is required, FEMA pays 75 percent and Mississippi pays 25 percent.

FEMA is expected to send Mississippi a bill for the state’s share of individual assistance from the late-April tornadoes in about three or four months, Womack said. He said the bill for flooding will come later, because damage assessment is now being done in the third of the 14 counties with flood damage. Officials are working north to south, as the Mississippi River levels recede.

Another kind of FEMA disaster aid is public assistance. Grants go to state government agencies, local governments and nonprofits that have government functions such as water associations or electric power associations. With public assistance, FEMA pays 75 percent, the state of Mississippi pays 12.5 percent and the entity receiving the grant (local government, specific state agency, nonprofit with government function) pays 12.5 percent. Again, Womack said it could be a while before the state’s expense is calculated.

Womack said the total amount of FEMA public assistance after Hurricane Katrina in Mississippi was $3 billion, while there are $700 million to $800 million worth of recovery projects still pending.

“But Katrina was catastrophic,” Womack said.

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