The reward for surviving Sandy may be higher taxes

'Stuff you have to do' slams municipal, state coffers

By Wayne Parry

Associated Press

Published: Thursday, Nov. 29 2012 9:24 p.m. MST

With local towns reeling and state governments equally cash-strapped, many are looking to the federal government to make things right through the Federal Emergency Management Agency, the arm of government that has paid out billions in disaster recovery funds for Midwestern floods, tornadoes and Hurricane Katrina, among others.

But politically, Sandy couldn't have come at a worse time, with Republicans and Democrats locked in a bitter standoff over spending and taxes as a series of painful automatic tax increases and spending cuts known as the fiscal cliff looms if lawmakers can't agree on a deficit reduction plan. Lawmakers from states hit hard by Sandy are eager for the White House to make its emergency request to Congress for more Sandy money.

A new disaster aid funding plan was put in place by last year's budget agreement that permits President Barack Obama to seek another $5.4 billion in disaster aid — on top of $7.1 billion approved as part of a six-month government funding bill — without breaking budget limits. Lawmakers are eager to at least obtain the $5.4 billion during Congress' lame duck session. It's more likely any additional funds would come next year.

There's also a possibility that more Sandy funding could get wrapped into a broader budget deal as part of the fiscal cliff talks.

On Wednesday, FEMA approved $8.3 million for debris removal in four New Jersey municipalities, and New Jersey's state government got $31.1 million for feeding and housing rescue and utility workers after the storm.

On New York's Long Island, Long Beach City Manager Jack Schnirman said the community already took steps this year to reduce a $10.25 million deficit from its $87 million annual budget. The city workforce was cut by 10 percent, including five firefighters from a 35-member force. The city also imposed a three-year tax surcharge on all homeowners to close the deficit.

That puts the city in no position to ask taxpayers to cover the costs of Sandy, which he estimated at $200 million. Moody's Investor Service says after FEMA reimbursements, the city could be left with a bill of as much as $25 million. Schnirman said he is still seeking ways for other federal or state money to cover that cost.

"We can't go back to our taxpayers," he said. "That's not a viable option."

Municipal governments are already doing the calculations — and not liking the answers. On the eastern half of Long Island, Suffolk County officials say Sandy has cost an estimated $70 million for debris removal and beach and road repairs, as well as police overtime. A county official estimated that after FEMA reimbursements, the county could be on the hook for $50 million but didn't anticipate having to raise taxes.

In Point Pleasant Beach, N.J., Mayor Vincent Barrella is bracing for a higher tax rate in a town that has already approved $2.4 million for emergency cleanup. It approved more than $1 million in spending this week for boardwalk repairs, sand removal, replacing police cars destroyed in the storm, a front-end loader and other Sandy-related costs.

"This is stuff you have to do," Barrella said. "You have to haul away the debris, you have to pick up the downed trees; you can't just leave the sand in the middle of the street."

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