Severe weather costs Michigan millions. Can funding meet demands?

• Michigan’s Disaster Emergency Contingency Fund is running on fumes as municipalities apply to recoup cleanup costs
• Lawmakers are debating whether and how to replenish the fund, which is facing a $15 million deficit
• House Democrats are proposing creating of an alternative fund to address the rising costs of climate change

LANSING — When tornadoes rolled through Kalamazoo County last month, Portage City Manager Pat McGinnis’ home was spared the worst of it.

That couldn’t be said for the rest of the city, however, which bore the brunt of a 135 mph tornado, according to the National Weather Service.

By the time winds calmed, the city estimated roughly $2 million in tree damage and another $3 million in city property damage — too little to meet the $18 million threshold that would trigger federal disaster aid. 

“We’re hoping it’s all going to be insured,” McGinnis told Bridge Michigan on Monday, saying the city tapped into its own “rainy day fund” to pay for cleanup in the immediate aftermath. “The tree damage is likely going to be our single largest cost in the long term.”

The state will likely reimburse Portage for part of its costs, but when that funding will be available remains unclear. 

Michigan partially repays local governments through its Disaster Emergency Contingency Fund, which can be tapped once the governor declares a state of emergency or state of disaster for an afflicted area.

But worsening weather events have put a strain on the fund, making it potentially insolvent and leaving some communities waiting more than a year for financial assistance. 

The money is so in-demand, officials say the fund would be roughly $15 million short if the state wrote all requested cleanup checks today. 

Gov. Gretchen Whitmer and the Democratic-led Legislature are debating additional funding, but they are at odds on how best to do that while balancing the state budget in the face of rising costs associated with climate change. 

Conversations are ongoing, Whitmer press secretary Stacey LaRouche told Bridge last week, saying “the governor will continue to work with anyone to … get Michiganders back to normal faster after an emergency.” 

Worsening weather wallops state

Michigan is one of 46 states, plus the District of Columbia, to have a statewide disaster account, according to a 2020 study from Pew Charitable Trust, a nonprofit public interest group. 

Under Michigan law, the account must have between $2.5 and $10 million in it. The balance stood at $3.5 million as of June 4, though all of that money has already been allocated for various relief efforts.

Municipalities impacted by weather or other disasters can apply for state funding to help recoup cleanup costs otherwise eaten by their personal emergency funds. 

But if all pending fund requests were paid off tomorrow, the balance would unofficially sit at negative $15.1 million, said Lauren Phillips, spokesperson for the state police Emergency Management and Homeland Security Division.

“At its current funding level,” she added, “there is not enough money in the (Disaster Emergency Contingency Fund) to cover current or future disaster needs.”

While the number of requests for emergency funds has stayed similar year-over-year, Phillips said, what hasn’t is the severity of the disasters. 

Billion-dollar weather events have increased across the country by 130% in the last five years, as compared to previous decades, according to 2022 data from the nonpartisan National Conference of State Legislatures. 

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Michigan has not experienced a weather event that costly, but as McGinnis said, “thank goodness it wasn’t our community — next time it could be.” 

With that severe weather can come steeper cleanup costs. So steep, bills for some communities are still outstanding a year later.

Cleanup costs for flooding in the Upper Peninsula after 2023’s rapid snowmelt is estimated to cost over $5.1 million in state contingency funds. Tornadoes and severe storms in nine Lower Peninsula counties later that same year are also estimated to pull just over $4.1 million from the fund. 

The state has not yet approved those requested repayments. 

It has approved $5.6 million in other disaster relief funding and owes an estimated $3.7 million to the Federal Emergency Management Agency for cleanup in several central and southeast Michigan counties for severe weather in 2023.

Those payments will leave the fund with a $5.9 million deficit, according to state police data. The damage done in Portage, as well as the neighboring Texas and Pavillion townships, hasn’t even entered the equation.

McGinnis, the city manager, is keeping an optimistic attitude about Portage’s reimbursement wait. He expects “quite a thick roll of red tape that we're going to need to tolerate,” but he said that means the process is thorough.

“We need to be very judicious in how we reimburse and support communities that have been affected by disasters,” he said. “It takes a little time to make sure that we're being considerate and responsible with those tax dollars.”

‘Increasing costs of natural disasters’

Whitmer and legislative leaders appear to agree on the need for more disaster cleanup funding. 

But how to do that, and how much money to allocate, remains a point of contention as lawmakers work to finalize the state budget in coming weeks or months. 

House Democrats are proposing an alternative to the state’s traditional cleanup fund: $50 million for a new “Climate Change Emergency Disaster Relief” fund.

That money would go toward covering “natural events caused by climate change resulting in negative economic impacts, widespread or severe damage, injury, or loss of life” otherwise not eligible for federal relief. 

It’s not immediately clear, however, if that plan would conflict with state law, which requires lawmakers to maintain the traditional disaster emergency fund. 

“I think we all have a shared goal of making sure we have more money for natural disasters,” said Jason Morgan, an Ann Arbor Democrat who oversees the House state police budget subcommittee.

“I think it's clear that none of our budgets put in enough money for what I see as increasing costs of natural disasters in our state. … We can’t just leave these communities on their own.”

The House alternative is more generous than the budget proposed by Whitmer, who in February called for a $10 million deposit for the traditional emergency fund. 

Her office continues to advocate for that disaster response funding. 

“With climate change causing more extreme weather events, the legislature must adjust accordingly to ensure there are resources to meet the needs of impacted communities,” LaRouche, the governor’s spokesperson, said. 

“As we enter severe weather season, these efforts take on increased urgency with potentially costly storm response efforts on the horizon.”

The Michigan Senate, meanwhile, approved $7.5 million for the traditional disaster emergency fund in May as part of a supplemental spending bill the House has not taken up. 

Sen. Kevin Hertel, a Saint Clair Shores Democrat who chairs the upper chamber’s state police budget subcommittee, told Bridge raising the $10 million fund cap that is currently written into state law is “definitely a conversation that needs to be had.”

“The last thing we want is when people are experiencing devastating effects from our disasters that they have to wait on funding,” he said.