Joplin tornado damage could reach $3 billion
This article first appeared in the St. Louis Beacon, May 26, 2011 - WASHINGTON - The powerful tornado that struck Joplin -- the deadliest such twister in nearly six decades -- may have caused as much as $3 billion in damages as it flattened schools, businesses and houses in its destructive path, experts say.
While insurance firms will pick up much of the tab for rebuilding insured structures, federal, state and local governments will have many other costs to cover. Typically, the federal government pays 75 percent of the emergency costs of responding to such declared disasters -- with state and local governments covering the rest.
But the tornado-related expenses in Joplin are likely to be so high that both of Missouri's U.S. senators -- Sens. Roy Blunt, a Republican, and Claire McCaskill, a Democrat -- urged Homeland Security Secretary Janet Napolitano in separate telephone calls Wednesday to increase the federal share as high as feasible.
"I am asking for 100 percent federal reimbursement to local governments," Blunt told reporters Thursday. "They've agreed to 75 percent, [but] I think they have to come to a better number than that." A spokeswoman for McCaskill said the senator had also asked Napolitano for a higher federal match -- perhaps the 90 percent match that Alabama is getting for cleanup in the wake of last month's killer twisters.
But with Congress virtually gridlocked over budget issues -- and Republicans demanding "offset" cuts to match every new spending item -- lawmakers are confronting the politics of appropriating billions in additional federal expenses related to this spring's tornadoes and flooding in the Ohio and Lower Mississippi River basins.
"We'll have to do an emergency supplemental bill [to cover federal costs] for all the flooding and the tornadoes" this spring, said U.S. Rep. JoAnn Emerson, R-Cape Girardeau, who chairs a House Appropriations subcommittee.
Emerson told the Beacon that the emergency funding would likely amount to several billion dollars. Otherwise, she said, the Federal Emergency Management Agency "will run out of money by the end of the fiscal year," which is Sept. 30.
'Offsets' for Tornado, Flood Costs?
To make room for the tornado and flood costs, other federal expenditures may have to be trimmed â€” at a time when lawmakers are trying to squeeze every dollar they can out of the budget. The U.S. House Majority Leader, Rep. Eric Cantor, R-Va., said this week that any additional federal disaster aid this year would have to be offset by cuts made elsewhere in the budget.
Many House Democrats objected to Cantor's position. "I don't think you need to have [budget] offsets in an emergency of this proportion with widespread damage," U.S. Rep. William Lacy Clay, D-St. Louis, told the Beacon. "Normally, there is a pot of money associated with FEMA that we dip into for these kind of disasters. But this year has been quite busy when it comes to disasters. If the money is depleted, we need to replace it."
In a Senate speech, McCaskill chastised Cantor. "I have a hard time believing that if this was in his congressional district he would be talking about how additional disaster assistance would not be available unless we found some other program to take it from," she said Wednesday.
"It must be available. This cannot be a political football. ... That's what the federal tax dollars are for, to provide assistance when there is no assistance available for communities and for states because of the wrath of Mother Nature. We must stand with Joplin and we will."
But Blunt dismissed McCaskill's criticism on Thursday. He told reporters that Cantor had "clarified that he believed that we needed to offset this expenditure, but he was also working hard to be sure we found the places that the federal government could save money" and offset the added FEMA expenditures.
While he said he agreed with Cantor that "we have to prioritize spending at the federal level these days," Blunt said Joplin disaster relief "is clearly a priority." He said Congress was obligated to fund FEMA's extra disaster expenses, but added that he was sure that Cantor had "come up with some pretty solid ideas of where those offsets could come from" to make budget room for emergency aid.
Cantor told The Huffington Post that it is important to reach out to people who suffer, but he added that, "We can find things we don't need to spend on to pay for it." Given the trillions of dollars in the federal budget, Cantor said "it's about priorities."
Emerson said Cantor had assured her and Blunt "that he has found the money" to offset the extra FEMA costs. "I personally don't think [extra FEMA money] needs to be offset because this is an emergency and I think it's an inherent function of government," Emerson said. "But if [Cantor] has the money to offset it, that's all the better."
Emerson estimated that the FEMA expenses related to the Joplin tornado, the tornadoes that hit the Mid-South in April and this spring's flooding in the Lower Mississippi would amount to "several billion dollars." She told the Beacon that about $1 billion might be needed just to rebuild levees such as Birds Point and repair other infrastructure in the river basin, from southeast Missouri to Louisiana.
"The reason we can't do an emergency supplemental right now is that there is no way of knowing, with all of these tornadoes," the extent of the federal costs, Emerson said. "In some instances, we've got to wait for the water to recede" from flooded areas. She said it might be another month before FEMA knows how much more money it will need.
On Tuesday, the House Appropriations Committee had approved $1.5 billion for FEMA -- offset by cutting a similar amount that the Energy Department had failed to obligate for a fuel-efficency loan program. But Emerson said those funds were not related to the recent tornado and flooding expenses.
Tremendous Challenges in Rebuilding Joplin
In the time-honored tradition of largess during presidential visits, many observers are expecting President Barack Obama to offer special federal aid when he travels to Joplin on Sunday.
"I'm glad the president is going" to Joplin, said Blunt, who said he had been asked but will not accompany Obama. "I think it's important for the president to see what's going on there." A McCaskill staffer said the senator had been invited but had not yet made a commitment.
When he visits, Obama -- who has spent this week in Europe -- will get a glimpse of the devastation in Joplin. Eqecat Inc., a "catastrophe modeling" company, has estimated that the Joplin tornado caused from $1 billion to $3 billion worth of damage to insured buildings, including homes, businesses and factories as well as vehicles.
The firm based its estimate on initial reports that the tornado destroyed as many as 2,500 buildings and damaged 10,000 others. But the firm cannot project total costs of the tornado damage because it does not have data for uninsured losses.
"I've heard a number as high as $3 billion" in Joplin damages, Blunt said. "I'll be particularly interested to hear -- as I was [after a tornado hit] the St. Louis airport -- what the local governments had done about the loss they had," especially to school districts. "The school districts will have substantial losses as they look at how to restore all their buildings. I hope they have enough insurance to get that done."
While Blunt added that "a lot of the losses will be insured," he said he was concerned about how well the Joplin school district was insured. He said the district is facing "a huge challenge" in trying to replace a high school, a vocational building and three elementary schools -- along with repairs to two other damaged elementary schools.
"We've got to get these schools open in September," McCaskill said. "We've got to get this hospital rebuilt. We've got to make sure that this community is not left stranded without the assistance it needs."
Blunt told reporters that property insurance rates in parts of Missouri could increase in response to this spring's tornadoes and flooding. "It could happen," he said. "Generally there is a community rating for property damage. The tornadoes this spring may be figured into that, to some extent."
But Blunt pointed out that there are limits to FEMA assistance in Joplin. "They can help people get temporary housing, but they can't do much for people who have housing that is uninsured or underinsured. ... So we're talking to the Housing and Urban Development people and others to see what programs they might have" to help.
FEMA Administrator Craig Fugate remained in Joplin on Thursday "to ensure that the state has all the support it needs" for rescue and cleanup operations. He was meeting with survivors, state and local officials, first responders and voluntary organizations that are working in Joplin. Other FEMA or related federal efforts in Joplin include:
- The opening of a Disaster Recovery Center staffed by state, voluntary agency and federal workers to help people whose homes or businesses were affected by recent storms and tornadoes. It is open 12 hours a day, seven days a week.
- A federal mortuary assistance team traveled to Joplin to give technical assistance in dealing with the 127 deaths from the tornado. The U.S. Department of Health and Human Services can coordinate hospital medical needs and patient evacuations, if needed.
- Supplies including meals, water, cots and blankets are either on site or en route to three bases in Missouri that will allow FEMA to move supplies quickly when needed.
- At least half a dozen FEMA community relations teams are meeting with disaster survivors, helping explain and register survivors for assistance. As of Thursday, the teams had worked one-on-one with more than 200 tornado survivors in Joplin.