President’s Budget and Earmarks
The Big News - $6.8 billion in the budget request for the Corps of Engineers.
While we’re waiting for the President’s full budget to be released in late May, the ‘Skinny’ is out, and Congress is caught up with earmarks. If you hadn’t heard, earmarks are back (on the House side at least), which will make for an interesting debate with the Senate, which hasn’t decided which path it will take yet. By the way, the House is calling them “Community Project Funding” Requests. Regardless, the issue is more complex than bipartisan. Now that earmarks are back, everybody wants one. Its not that simple to get one, though. Congress has made very specific rules for the earmarking process.
‘Coastal Resilience’ comes up only twice in the President’s budget preview, both following sections on climate... Some is better than none. The reality is the President has a lot more to deal with involving the economy and the coronavirus before he can really tackle climate change with the focus and attention it needs. Below is an excerpt from the Skinny which also includes key directives to invest in reducing the risk of damages from floods and storms and restoring aquatic ecosystems.
Why $6.8 billion is meaningful -
Trump requested just $4.8 billion last year, a huge slash from prior years Civil Works Budget. The good news, Congress always adds money to the president’s budget request, as it did significantly last year. Which means that this figure gives the Corps a +$2 billion head-start for Congress to add additional funds from where Congress started last year. That’s significant.
We don’t know yet whether there will be a work plan, or how the Senate will deal with earmarks. But if Congress uses earmarks in the Corps’ appropriations bill, it better earmark every cent that it can because Work Plans have become a way for the Office of Management and Budget to impose its will on Congress. For example, OMB appropriated Corps money to two new start projects that literally can’t use the money as a way of avoiding giving the money to the type of projects that Congress said it wanted.
North Carolina beaches have been finding their way into the news lately based on an apparent mix-up with the Corps and Congress, but we do not really see it as a mix up. Let’s just stick to the facts here for any North Carolinians that might be reading; The Wrightsville and Carolina-Kure projects were authorized. They were NOT funded. Usually, it takes at least a full year before authorized projects can get funded. The Congressional/Corps process for federal project development is slow, but deliberate. Congress must authorize a project before it can be funded. Misleading press releases from agencies or members of Congress are more common than you might think.
Meanwhile, the Town of Avon is facing enormous property tax hikes in order to pay to protect its main road from washing away. In some case the town wants to raise property taxes by 50% or more.
On the Subject of Beach Nourishment
This year’s budget will be tight. New Jersey alone is scheduled for a big year. Right now, we are in the process of collecting information on all potential beach projects for FY21 and 22. The list includes all scheduled, delayed (backlogged) and new start requests. So far, this year’s scheduled request comes in around $120 million. Last year’s beach nourishment funding was $56 million, and we have not broken $100 mil in over a decade. In short, this year there is going to have to be a strong push for beach nourishment funds. There is over $20 million in currently backlogged nourishment projects and possibly another $40 million in new start requests (assuming they are selected for a new start).
New Changes to NFIP
New flood insurance premiums will take effect on Oct. 1, 2021, for new policies and April 1, 2022, for the rest, FEMA said. The new premiums are to be based on a property’s value, risk of flooding and other factors, rather than simply on a property’s elevation in a flood zone. FEMA says its risk analysis will make policies and costs more ‘equitable’; however other experts say the NFIP to date is basically a subsidy. New policies will be based on actual risk, and that means higher premium costs for many policyholders. FEMA, however, says the hike will only average a 4% increase on more than 200,000 policies of its more than 5,000,000 policies in total.