Sandy-Related Costs Hit Local Government Budgets Hard

Towns and cities affected are requesting federal aid, but that may not even cover all of Sandy's costs.

New York and New Jersey communities will soon be grappling not just with clean-up after Hurricane Sandy, but the economic toll that the storm is taking on their budgets, according to the Wall Street Journal (paywall).

Sandy-related costs could double Nassau County’s $25 million budget deficit, while in Long Beach, Sandy costs are estimated around $200 million, a lot more than the city’s 488 million total annual budget. In New Jersey, the financial toll of Sandy won’t help Gov. Chris Christie’s plan to cut taxes either, says the Journal.

"This would exacerbate the fiscal problems they're already facing," New York State Association of Counties spokesman Mark LaVigne told the paper. "It will reduce sales tax revenues for last quarter of fiscal year, it will take some properties off tax rolls, it has increased the needs for programs and services counties provide."

While officials are optimistic that they would be reimbursed for costs like overtime for emergency personnel and infrastructure repair, the Federal Emergency Management Agency generally reimburses local governments for only 75 percent of the costs for disaster expenses. New York and New Jersey are seeking 100 percent, though it is rare for FEMA to fully reimburse governments.

Gov. Andrew Cuomo is requesting of $30 billion in federal aid for New York State, and if Congress doesn't approve the request, the state would then have to trim agency spending and cut aid to local governments, according to the Journal.

In New York City, officials expect most of the $634 million that was spent dealing with Sandy would be covered by FEMA, though that number doesn’t include overtime costs for city workers.


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