AUSTIN — It’s difficult at this point to say exactly how Texas will go about paying to recover from a disaster whose effects are still not fully measured, but there’s now at least a price tag on the damage caused by Hurricane Harvey.
“We estimated that Hurricane Harvey is to be the costliest weather disaster in U.S. history at $190 billion or one full percentage point of the GDP,” Joel N. Myers, president and chairman of AccuWeather, said in a statement. “Some of the losses will be covered by insurance, some will not, so the losses will be felt in a variety of ways by millions of people.”
President Trump last week signed a $15 billion Harvey aid package, despite booing from GOP lawmakers and “no” votes from four Texas Republicans in the U.S. House.
But it’ll take more than the federal dollars to restore what Harvey damaged and let people get on with life in the wake of the floods and winds.
Houston Mayor Sylvester Turner on Monday proposed a one-year, 8.9 percent property tax rate hike to generate about $113 million that would help cover costs for expenses federal dollars won’t go toward: debris removal, lost city vehicles, repairs to city buildings and sewage treatment plants, according to local media reports.
The hit to municipal coffers comes on top of some 137,000 damaged houses in the greater Houston area, representing about $150 million in lost property tax revenue.
And while the $190 billion dwarfs the totals for Hurricane Ike in 2008 or Hurricane Rita in 2003 — $35 billion and $24 billion, respectively — economist Ray Perryman, who heads the Perryman Group, said that there’s more to the Harvey equation than simply damages.
“Business operations have been interrupted, causing lost revenue and profits even beyond the damage to facilities,” Perryman wrote in a post-Harvey report. “In many cases, these revenues cannot be recouped.
“Productivity has also been affected as workers are either absent due to problems with their homes and property or less effective on the job as they deal with those issues. According to calculations from our models, even a 10 percent drop in productivity for two months in the immediate and directly affected areas could bring a loss of almost $3 billion in gross product.”
The good news is, long-term damage to Houston’s economic engine is minimal.
“This is not like Katrina, which filled up New Orleans like a bathtub,” said Ed Hirs, a University of Houston energy economist. “We saw the Corpus Christi refineries being restarted the same week Harvey made its impact.
“These engines keep paying pay checks. That’s what’s so important to continuing business as usual.”
Mark Jones, a Rice University political scientist, said appointing Texas A&M University System Chancellor John Sharp, a veteran politician — and an old-school Democrat — to head the newly announced Governor’s Commission to Rebuild Texas was a smart move.
“In cities like Houston you have to work with a Democratic mayor,” Jones said. “It’s a novel idea and one that’s very forward thinking.”
Jones said “obtaining as much money as possible from the federal government,” will be key to Texas’ economic recovery.
A good portion of federal dollars come as direct assistance from the likes of the Federal Emergency Management Agency.
FEMA this week opened a disaster recovery center in Dallas to help survivors and those evacuated from 39 counties included in the Texas federal disaster declaration for Hurricane Harvey and subsequent floods.
Three Houston-area state/FEMA recovery centers are also open.
Small Business Administration employees are on hand to help applicants with disaster loans which Robert Stein, a Rice University political scientist, said are set at rates that are so low, “the government is basically giving you money.
Both Stein and Jones are confident that the state will, sooner or later, also tap into its rainy day fund to the tune of $5 billion to $6 billion to help with the bail out.
“Days don’t get much rainier than Harvey,” Jones said.
John Austin covers the Texas statehouse for CNHI’s newspapers and websites. Reach him at email@example.com.