Impacts of the Great Recession on Communities

The following is offered by Dr. John Plodinec, Associate Director for Community Resilience Certification at CARRI and Science Advisor, Savannah River National Laboratory.

In previous postings, I’ve tried to present trends that pointed to the need for a community resilience framework. These trends (growing complexity of communities, the new spectrum of hazards facing communities, and the accelerating rate of change) by themselves make the case for the need for a community resilience framework. In this posting and the next, I’ll examine reasons why we need such a framework NOW – first the impacts of the Great Recession, and then the unrealistic expectations of so many of our citizens.

The Great Recession of the last two+ years has created a new reality for communities. The resources that communities, states, and the federal government have available for disaster recovery may not be there for the next disaster. Across the country, tax revenues are falling. At least 35 states expect to have budget shortfalls this year; last year, 49 out of the 50 actually did. According to the Bureau of Labor Statistics, that translated to almost 300,000 less workers in government in December, 2009, than a year before – and at least 17 states already have announced they will reduce staff again this year. This year, the National Debt is expected to approach 90% of our national GDP. We just don’t have the money - or the human resources - to repeat the recovery from Katrina (cost $230B and counting), at least not the way we’ve done it before.

And it does not look like the economic picture will significantly improve any time soon. Only the most glowing – and unrealistic – projections of our economy lead to reductions of more than a percent a year in unemployment over the next decade. These rosy assumptions fly in the face of the projections of many economists that we will see another economic dip within the next two years.

Overlaid on this economic bad news (no wonder economics is known as the Dismal Science!) is a ticking time bomb: the retirement of the Baby Boomers. Projections made five years ago were that the Medicare and Medicaid expenses alone would be at least 10 times the national debt (currently $12.3 T). But some nice work done by our colleague Dr. Andy Felts of the College of Charleston suggests that the costs may be even higher. Using data from Charleston County, SC, Andy showed that the per capita cost of providing county services to seniors (those 65 or greater) was rising almost twice as fast as for everyone else. These cost increases are expected to accelerate as the Baby Boomers become so-called “Super Seniors” (75 or older). We’re hearing similar projections across the country.

Thus, national economic recovery will be protracted, with no guarantee of complete success. Resources for recovery are likely to be constrained and harder to obtain. This puts a real premium on community efficiency: more precisely identifying the resources a community will need to recover from future disasters – before disaster strikes – so that the community can rapidly secure them after a disaster.

A community resilience framework can help improve community efficiency in several ways:

• Communities can more accurately predict what will be lost, i.e., what internal resources might not be available, and – of equal importance – what resources ought to be available within the community that can be utilized. For example, separating debris by disposal categories (e.g., separating “green” waste – downed trees, for example – from white wares can lead to big savings to communities in disposal costs. However, it is very expensive to do if all of the waste is aggregated. If the community prepares its citizens to carry out this task after the disaster it can save both segregation and disposal costs.
• Communities can identify sources of funding for recovery, and the requirements associated with them. Too many communities have built their plans on the expectation of federal funds only to find that they had to repay the federal government because they hadn’t complied with a particular agency’s rules. As you are reading this, meetings between FEMA and communities in Mississippi and Alabama are being held to decide how much of the Stafford Act funding moved so expeditiously after Katrina must now be paid back because of poor accounting or documentation practices.
• Communities can prioritize the sources of funds they pursue.
• Communities can assess how well they can use the resources, and streamline their systems to remove bottlenecks.

Thus, the Great Recession has created a new reality of constrained resources that communities must face. A community resilience framework can help communities survive and thrive even in this new era of constrained resources.