NCPA - National Center for Policy Analysis


November 22, 2005

Hurricanes Katrina and Rita have put the spotlight on the Federal Emergency Management Agency, which goes into action when a governor asks the president to declare an emergency. It is proper that the states initiate the process, because they know their territories, needs and capabilities. FEMA has technical expertise, training and coordination, but it has also been given the questionable role of extensive, expensive personal assistance and community rebuilding, says economist George M. Stephens.

There are two reasons not to have a nationally funded disaster-relief program, he says:

  • One is that we are reducing the penalty for locating in dangerous areas; people can settle in flood plains or on a geologic fault knowing that they won't have to bear the full financial consequences.
  • The second reason is that spending is separated from accountability; the people of North Carolina don't monitor how their taxes are spent in the Mississippi-Missouri valley floods and California mudslides and earthquakes.

It would be better public policy to make each state responsible for its own reconstruction, says Stephens:

  • Then the disaster-prone ones would have higher taxes, which would tend to discourage settlement in irrational places.
  • States in turn might be advised to make their counties fund much of the rebuilding, so that the ones primarily exposed would adopt prudent development practices.

FEMA's long-term rebuilding aid should "face the sunset" in about four years, enough time for a couple of legislative sessions in which the states can organize. FEMA can then provide what it does best: expertise, training and coordination, says Stephens.

Source: George M. Stephens, "Make States Responsible for Own Disaster Recovery," Carolina Journal, Vol. 14, No. 11, November 2005.

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