Predicting the unpredictable: budgeting for flooding and climate change

August 11, 2024

As Vermont recovers from yet another round of flooding and braces for what’s left of Tropical Storm Debby, it may come as no surprise that Vermont is ranked seventh in the nation for the most federal disaster declarations due to extreme weather since 2011.

And some parts are harder hit than others: Washington County is tied for second as the most disaster-prone county in the country, while Lamoille, Chittenden, Orange, Orleans and Essex are all tied for fourth.

In addition to the very real emotional toll, these disasters cost the state money. Damage estimates from last summer’s flooding exceed $600 million—and over $90 million of that fell on state and local government. In other words: disasters are expensive, and the state needs to start accounting for unanticipated costs from flooding and other disasters.

While the hope is that the federal government continues to pick up most of the tab, the current funding structure of federal programs and increasingly localized flooding can leave communities stranded. The Federal Emergency Management Agency’s (FEMA) Public Assistance program—which helps to rebuild public infrastructure—is one of the largest emergency relief programs, but these dollars are not guaranteed. To access this money, the state and each recovering county must hit a per-capita damage threshold set by FEMA. If the county does not hit the threshold, it cannot—except in limited circumstances—access FEMA dollars for disaster recovery. Likewise, if a county hits the threshold but the state does not, FEMA can choose not to provide federal recovery dollars.

Even with access to Public Assistance dollars, there are still costs that must be carried by state or local governments. Larger projects are funded on a reimbursement basis, so the state or town must have funding on hand to receive federal dollars later. FEMA typically covers 75 percent of the funding for a project, leaving state and local funding to pick up a quarter of the tab, which can add up quickly.

Other resources can be brought to bear in the recovery—insurance payouts, private donations, and property owners’ pockets. But these are not dependable sources of relief available to all flood victims. For enrolled renters and homeowners, flood insurance typically covers more costs than the government. However, less than 1 percent of Vermont households have flood insurance despite the fact that many communities sit along rivers. Private donations and volunteering are another important source of assistance following flooding around the state, but they are typically just a fraction of what the government can provide. And these sources may dwindle as disasters increase in frequency and donors experience “flood fatigue.”

Climate change and its immediate effects are clear and present in the state, to the tune of hundreds of millions of dollars last year alone. These are new problems that the state didn’t face 10, 20, or 30 years ago, and they require new resources. Vermont needs to budget for the damage caused by more frequent extreme weather events and for mitigation projects to protect Vermonters, their homes, and other critical infrastructure. Even when a disaster is bad enough to warrant federal assistance, the state will face new, unanticipated costs. 

If the last two summers have taught us anything, it’s that we need to be prepared for the unpredictable.

Strafford resident Katrina Menard is State Policy Fellow at Public Assets Institute, a non-partisan, non-profit, people-centered, data-focused organization based in Montpelier.