SENATE PANEL LOOKS AT MOUNTING HARVEY RECOVERY COST

(AUSTIN) — The cost of Harvey recovery efforts could top $7 billion by the end of the fiscal year according to testimony offered before the Senate Finance Committee on Tuesday. The powerful storm that dropped a record amount of rainfall on southeast Texas last August is tied with Hurricane Katrina as the most costly storm in US history, with an estimated $125 billion in damage. Tens of thousands of Texans were displaced from their homes and many still live in hotels and other temporary accommodations, and thousands more were forced to move or change schools. Committee Chair Senator Jane Nelson of Flower Mound said that costs to the state to aid in rebuilding continue to grow. "We're going to keep shining a light on this until everyone receives the assistance they need," she said. "We're also going to keep a major eye on costs because they are adding up and are going to have a major impact on our budget."

In the six months since Harvey made landfall, about $2.1 billion in public funds have gone towards recovery efforts in southeast Texas. Most of that is federal money, with the state spending about $206 million in general revenue. Agencies estimate an additional $5.1 billion in all funds will be necessary to meet needs through the end of the fiscal year, costing the state $336 million in GR, according to testimony from the Legislative Budget Board. Some of these expenditures include funds for the approximately 7000 households still staying in hotels following the loss of their homes, money for debris removal, and shelter repair. The state also received a $1.1 billion grant from FEMA to help rebuild and mitigate future disasters. $500 million is immediately available for projects like local flood plain management, elevating flood-prone structures and retrofitting existing structures to reduce flood and fire risk. Governor Greg Abbott already announced that $180 million in grant money will go to buy out 9000 Harris County homes that lie in areas likely to flood in the future.

Rebuilding public education in affected regions will put a significant strain on the state budget for the next few years, said Texas Education Agency Commissioner Mike Morath. More than 1.5 million public school students lived in hurricane-affected areas, and many of these students didn't come back to the same schools after the hurricane. Morath said about 95 thousand students were displaced by the storm. Since schools receive money based on attendance, the state will send almost $100 million to districts to maintain funding levels from last year in districts that lost student population.

The state will also need to spend millions to help districts maintain money lost from property tax revenue following the storm. Local property taxes make up the bulk of school district funding, and damage and loss of property because of Harvey will lead to reduced property values and revenue for at least the next budget cycle, Morath told the committee. "You should expect fairly significant impact and pressure on the state budget from the Foundation School Program for the next biennium," he said. Morath said that lost local property tax revenue could approach three-quarters of a billion dollars.

Nelson told members that she expects the Legislature to help students in Harvey-affected areas when it meets again in January. "In speaking with other legislators, in speaking with our governor and Lt. Governor, I think you're going to see a very sympathetic legislature to the needs of those students in the districts that have been affected. We want those students to be taken care of, we want them to continue to learn," she said. "I won't speak for the next Legislature but my sense is that we're going to take care of those kids."

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