Quick Take
The Federal Emergency Management Agency has temporarily run out of money to fund new disaster repair, which could delay seven major road projects in Santa Cruz County needed in the wake of 2023 storms. Although Congress could fix the issue by fall, it’s exacerbating tension over how FEMA funding and reimbursement issues affect the county’s budget.
Facing a projected deficit of more than $6 billion and what’s expected to be a busy hurricane season, the Federal Emergency Management Agency announced last week that it had to shift priorities.
Until Congress authorizes the federal budget this fall, or pumps more money into the agency to keep up with a growing number of climate change-driven natural disasters across the United States, the agency will focus only on meeting immediate life and safety needs over fixing damages from past disasters.
This news landed like a kidney punch in Santa Cruz County, where the county government’s budget has been turned upside down by natural disasters and the glacial pace of FEMA’s reimbursements.
As of earlier this year, FEMA still owed the county more than $140 million in response cost and infrastructure repairs that the county fronted following federally declared disasters in 2017, 2020, 2023 and 2024. In the most recent budget, the county had to take on nearly $100 million in debt to pay for projects it had expected FEMA to already cover. The county has little flexibility in its budget and has no available money for another nearly 88 storm repair projects from 2023 and 2024, at a cost of roughly $50 million. County executives have said natural disasters and their effect on the budget are among the county’s most pressing issues.
The decision is likely to delay seven road repair projects the county had planned for the spring on Stetson Road, Redwood Drive, Schulties Road, Mountain Charlie Road, Bean Creek Road and Lockhart Gulch Road. Steve Wiesner, assistant director for the county’s community development and infrastructure department, said the county expected to receive a commitment for funding on those projects over the next several months, which would allow the county the confidence to break ground by spring. Wiesner said FEMA’s announcement muddles the timeline for those projects.
During its meeting Tuesday, the county’s board of supervisors appeared deflated by the news. District 5 Supervisor Bruce McPherson, whose district includes much of the disaster-prone Santa Cruz Mountains, called it “very discouraging.”
“I don’t think we can say it enough, but Congressman [Jimmy] Panetta and Congresswoman [Zoe] Lofgren, please understand that fully funding FEMA is one of the most important things you can do in Congress for Santa Cruz County,” District 1 Supervisor Manu Koenig said Tuesday.
In a written statement provided to Lookout by Panetta’s office, the congressman said he would “continue to keep pressure on the federal government to deliver.”
“[This] underscores what I’ve been pushing for in Congress, to appropriate additional federal funding for both emergency response and resiliency efforts,” the statement reads. “Providing FEMA with the resources and staffing it needs to serve communities like ours and respond swiftly and effectively to climate-based disasters is essential to saving lives, rebuilding property, and returning families to a sense of normalcy.”
In a written statement provided by Lofgren’s office, the congresswoman said she is “committed to ensuring Santa Cruz County receives every penny it’s owed from the federal government.”
“I’ve written to, called, and/or texted FEMA’s regional administrator whenever any government I represent has encountered a problem with FEMA reimbursements, and won’t hesitate to continue to do so in the future,” the statement read.
According to a report from Politico’s Climatewire, this marks the 10th time since 2003 that FEMA has had to pause its disaster relief funding and focus its money on meeting immediate life and safety needs. The same happened last year following the Maui wildfires and Hurricane Idalia in Florida. In August 2023, President Joe Biden urged Congress to increase FEMA’s disaster relief fund by $12 billion; Congress responded with $16 billion.
Earlier this year, the Biden-Harris administration called for Congress to put another $9 billion into the agency’s disaster fund. Panetta said he is “fully supportive” of that move.
FEMA’s announcement came after the agency released a monthly report that showed the agency projecting a $6.2 billion deficit by the end of the fiscal year. For natural disasters that have occurred since Aug. 1, 2017, FEMA has spent $271 billion in disaster relief. (More than half of that, $137 billion, came from costs associated with the COVID pandemic.)
Wiesner said if Congress can pass additional FEMA funding within the next few months, it’s possible the county’s seven disaster repair projects slated for the spring could move forward as planned. However, he said “it’s hard to tell with FEMA these days.”
Koenig said even if the projects move forward by the spring, this latest chapter in the county’s saga with the agency could be a harbinger.
“If this is a situation that FEMA gets pushed into more and more often, then that’s a huge problem,” Koenig said. “There are more and more natural disasters every year. If FEMA says they are only going to use their funds for life-saving activities and not infrastructure repairs, that forces Santa Cruz County to take a more self-help approach with fixes.”
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