Hurricane areas face a rising tide of financial woes

D'IBERVILLE, Miss. — Hurricane Katrina destroyed this city's police station, flooded seven of the 12 police vehicles and left 18 of the 65 municipal employees homeless.

As if that weren't enough, more than 40 percent of D'Iberville's roughly 4,000 homes were either blown apart by Katrina's winds or flooded so badly they must be torn down. Nobody knows how many of those homeowners had flood insurance or how many will rebuild, not to mention how many will continue paying their property taxes.

To top it all off, the cost of simply removing the debris from Katrina is probably going to run about $8 million — $2 million more than the city's annual budget. The federal government is expected to pay for all cleanup within 60 days of Katrina's Aug. 29 landfall, but without a change in policies, hard-hit D'Iberville will have to pick up some of the tab after that.

"It's put us in a bind, that's for sure," said Mary Lee Williams, the city clerk of this once-pleasant community just across Back Bay from Biloxi. "Everybody's worried. I'd guess 500 to 1,000 of our residents worked in the casinos in Biloxi, and they don't have jobs. A lot of our people may not come back."

Across a broad swath of the Gulf Coast from Pensacola to Houston, local government leaders are sharing Williams' worries. What Katrina didn't flood or rip apart with her 120-mph winds and storm surge when it roared ashore near New Orleans, Hurricane Rita destroyed when it pummeled the Texas-Louisiana border on Sept. 26.

Virtually every city, town, county and parish within 20 or 30 miles of the coast suffered major destruction. Now those governments are faced with rebuilding roads, unstopping sewers, cleaning up water treatment plants and replacing damaged vehicles and buildings, all while enduring major cuts in revenue, also due to the storms.

For Biloxi and Gulfport, cities that have blossomed in the past decade with the construction of floating casinos, the hit will be made worse by the loss of sales tax revenues from free-spending gamblers and the millions in licensing taxes paid by the casinos themselves.

Already, New Orleans Mayor Ray Nagin has announced his city must lay off 3,000 of its 6,000 municipal employees, and dozens of local governments around the region may soon be faced with similar, painful cutbacks.

Most of the governments are hoping the federal government will come to the rescue.

As Biloxi Mayor A.J. Holloway put it in a recent letter to residents, "I plan on following through on President Bush's words. He said to me, 'Do what you have to do to rebuild, and I'll find the money.' "