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How Can States Deal with the Next Crisis?

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Karen Kunz and Scott Pattison
February 2, 2024

In the last decade, the number of catastrophic, transformational events throughout the country have increased substantially, along with the recovery costs. The response from Congress and the President has been to allocate money to state and local governments.  

In many cases, state and local governments used portions of the federal funds provided for purposes other than to allocate them directly to associated repairs and services made necessary by the individual event. Many passed tax reduction bills and spending increases. In the case of the pandemic, many states used the federal dollars to replenish general funds, acquire and improve infrastructure, often before or in lieu of providing support services and unemployment or creating jobs. Some states did allocate a portion of their pandemic recovery funds to build out emergency response and support capacities but much more effort is needed.

The Federal Emergency Management Agency (FEMA) provides the lion’s share of financial assistance to states through The Disaster Relief Fund (DRF), which it manages. The DRF is funded through annual appropriation, with additional funding as needed through supplemental appropriations. Between 1993 and 2012 supplemental additions were relatively minor. Since then, the annual budget for the DRF has risen consistently and supplemental funding for the DRF has skyrocketed. In 2013 emergency supplemental spending for Hurricane Sandy amounted to almost twice the DRF’s annual budget. In 2017- 2018 (Hurricanes, Harvey, Irma and Maria), and 2020 and 2021 (COVID) those extraordinary supplementals continued, as needed to address the increasingly extraordinary events.

The increase in annual support, as well as Congress’ political ease in passing huge supplemental appropriations in response to national disasters, has enabled FEMA to significantly ramp up its capacity to respond to the increasing number of disasters.

Each year FEMA provides more support for states and localities for catastrophic disasters than in prior years. Correspondingly, the need for federal bailouts has become a vital part of states’ capacity to make it through these catastrophes. Localized natural disasters, averaging 18 occurrences per year since 2018, quickly become state and national emergencies, with recovery costs easily exceeding $1 billion each.

As we discovered in a previous study done for the IBM Center for the Business of Government, recent transformational events, such as the COVID pandemic, multiple hurricanes within months, and extensive, devastating wildfires have brought to light the lack of structural capacity within state governments and their agencies and programs, to collect and maintain baseline constituent and service data and performance metrics—let alone metrics that demonstrate the effectiveness of emergency supplemental allocations. As we wrote “Gathering and assembling data and measuring the effectiveness of programs and services affords transparency and accountability to the public. More importantly, knowing how service demands and resources—personnel, equipment, technology, funds, etc.—are allocated and the outcomes of those efforts, especially over time, enable lawmakers and agency directors to determine the effectiveness of outcomes and make informed decisions. This information also offers a baseline for preparedness planning, including capacity needs, under diverse conditions, including crisis conditions, such as environmental catastrophes (floods, wildfires, drought, etc.). In turn, these preparedness efforts would have informed decision-makers and directors of the extraordinary health and emergency response personnel and equipment, social service and business support needs of their constituency and offered pathways to meet those needs, at least at the onset of thee pandemic, if not throughout it. Finally, the capacity to provide timely information, medical care and equipment and social services to the public in a time of extreme turmoil would add to governments’ legitimation capacity.”

How do states build that capacity? An extensive assessment to determine capacity needs would include a review of their capacity to manage in turbulent environments. According to the late Bidhya Bowornwathana, a member of the Public Administration Faculty of Political Science at Chulalongkorn University, Thailand, “The capacity to manage emergency, chaos and crisis situations can be built by training politicians and bureaucrats, and by creating a cooperative culture of learning and relearning organizations.” Governance capabilities includes “the ability to build collaborative partnerships with transparency and accountability,” as well as “the capacity to build a strong yet accountable government.” The ability to anticipate and to predict the unpredictable is essential to capacity building.

Building capacity, especially to the extent envisioned by Bowornwathana, does not magically happen, nor does it happen overnight. It requires large amounts of effort, determination and money, over considerable time. Foundationally, the most important ingredient to capacity building is commitment. From lawmakers to front-line staff, buy-in and commitment, including financial guarantees, to support change and growth within the organization are essential to effecting reforms necessary to improve capacity and performance outcomes. With that, there are several ways that states and agencies can begin building capacity:

  • Increase personnel training
  • Build out management systems
  • Strengthen leadership and build relationships
  • Embrace a global perspective
  • Create space for innovation
  • Engage the public

The number of catastrophic disasters and increases in the cost of recovery are expected to continue to increase significantly. State and local governments, working with the federal government, need to build capacity to prepare for and recover from catastrophic events instead of reacting ad-hoc as they occur.

Authors: Karen Kunz is an Associate Professor at West Virginia University and Scott Pattison is deputy executive director of the Multistate Tax Commission and a senior fellow with the University of Ottawa Institute of Fiscal Studies. This article was written under the auspices of Barrett and Greene, Inc.

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