The government collects revenue in a few ways. The Federal government’s money comes from income taxes, payroll taxes, and corporate income taxes. The State of California makes money from tax collections, licensing fees, Federal aid, and returns on investments. Local jurisdictions and Tribal governments also have the power to levy taxes and generate revenue. Local jurisdictions, like cities and counties, generate revenue from sales and businesses, and property taxes.
Governments make budgets to dictate where money will go and how much. The process to create a budget is lengthy and involves many steps, including time for public input. For more information about this process, view this infographic on the Federal government and this one on the California State Budget.
To learn about the importance of budget advocacy, read this piece.
Federal government funding for disasters
The Federal agency that spends the most on disasters is the Federal Emergency Management Agency (FEMA). In addition to the money FEMA receives for regular operations, they also receive money for the Disaster Relief Fund, the primary vehicle for disaster assistance in the U.S. The amount allocated to the Fund is based on historical trends. However, the amount allocated is usually not enough because of the increase in the number and severity of disasters. Congress should allocate more to keep up with the needs of devastating disasters. This money is used to fund the assistance programs that support local communities after a Presidentially Declared Disaster. FEMA also provides critical money to States and Tribes for mitigation activities. Read more about Mitigation Planning in this piece.
The Department of Housing and Urban Development provides the second most disaster assistance after FEMA. The Community Development Block Grant Disaster Recovery (CDBG-DR) program is “funding of last resort,” offering critical support to rebuild housing, infrastructure, and the economic base. CDBG-DR doesn’t have standing authority, so it’s a special allocation of funds each year. Read more about CDBG-DR in this piece.
Other Federal agencies contribute to disaster preparedness and recovery as part of their regular operating budgets.
New bills, such as the 2021 Infrastructure Bill, can provide additional money that States can use for disaster resilience. For example, in the 2021 Infrastructure Bill, significant funding is proposed to support upgrading aging infrastructure to withstand the impacts of disasters and climate change.
State government funding for disasters
The State government supports local jurisdictions with disaster events that do not meet the threshold to require Federal intervention. The California Disaster Assistance Act (CDAA) authorizes the Director of the California Governor’s Office of Emergency Services (Cal OES) to administer a disaster assistance program that provides financial assistance from the State for costs incurred by local governments because of a disaster event. This includes funding the repair, restoration, or replacement of public real property damaged or destroyed by a disaster. This is available when the Director concurs with a local emergency proclamation requesting State disaster assistance.
The State also manages programs that fund local jurisdictions in mitigating risk to disasters and building resiliency. For example, Cal Fire offers several grants to mitigate wildfire risk and support forest health. The 2021 budget from Governor Newson also offers historic amounts of money for resiliency.
Local government funding for disasters
Local jurisdictions in California struggle to raise money for all their current and desired activities. One of the primary reasons for this is Proposition 13, which was approved by voters in 1978 and which dramatically caps how much local governments can levy for property taxes. For most of the rest of the United States, property taxes are a major source of local government funding. However, due to Proposition 13, the annual real estate tax on a parcel of property is limited to 1% of its assessed value at the time of sale. This "assessed value" may be increased only by a maximum of 2% per year, unless and until the property is sold. Proposition 13 has severely impacted the amount of local funding available for cities in California, leading them to rely heavily on funding from the State.
Actions to take for everyone
Engage in budget advocacy to ensure existing Federal, State, and local money goes to disaster resiliency, especially for programs serving frontline communities.
Support efforts to reform Proposition 13. For example, Proposition 15 in 2020 would have amended the California State Constitution to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value.