Pa. lawmaker proposes fund for flood cleanups

Citing the Iowa disaster to illustrate the devastating cost of floods, a Pennsylvania legislator and a top environmental official yesterday urged passage of a long-stalled bill that would create the state's first dedicated fund for flood prevention and storm cleanup.

The proposed Pennsylvania Flood Grant and Assistance Program would require all property owners to pay a surcharge of 20 cents on every $100 of insurance premium payment, expected to amount to $1 a year for the average residential policy.

The levy would generate $9.5 million annually, said State Rep. Jim Wansacz (D., Lackawanna), who introduced House Bill 1989 early last year. He renewed his public appeal for legislative support yesterday after news outlets carried horrifying footage of Midwest downtowns and farmland under water.

With hurricane season upon us, "it's just a matter of time before we get hit," Wansacz told reporters in a conference call. He was joined by Kathleen McGinty, secretary of the Department of Environmental Protection.

The bill would kick-start 80 flood-mitigation projects that are "shovel ready" but unfunded, McGinty said.

The money would be used only in floods that are not classified as federal disasters - a designation that triggers financial aid from Washington. The more common Pennsylvania event is the flash flood, which causes considerable havoc in creekside communities but usually does not rise to the level of a federal disaster.

Wansacz's bill awaits action by the full House, with no vote yet scheduled. In the Senate, lawmakers are not enthusiastic about the idea, said Patrick Henderson, executive director of the Senate Environmental Resources and Energy Committee.

"Raising or assessing a new fee or tax can't be the instinctive reaction every time a need is identified," he said.

The insurance lobby also opposes the bill.

"We think flood mitigation is a good goal, but the tax is a flawed approach for funding it," said Samuel R. Marshall, president and chief executive officer of the Insurance Federation of Pennsylvania Inc.

If further analysis shows that Wansacz's program could work, Marshall said, the money should come from general tax revenue, "as is the case with other government programs."

"Our opposition . . . is about protecting the bottom line of our policyholders because they are the ones who will pay this tax, even though they may get no benefit from it," he said.

Wansacz offered another option: "The insurance companies can eat this" surcharge rather than pass it on.

Marshall dismissed the idea. "Suggesting that insurers . . . can simply 'eat' a tax increase isn't realistic economics," he said.

In flood-tortured Darby Borough, manager Mark Possenti said small towns cannot easily pick up the tab for flood cleanups, which his community has faced time and again.

In an August 2004 flood, several feet of water invaded a number of basements, roads were closed, and at least two cars wound up in the Darby Creek. The borough spent at least $10,000 from the general fund on cleanup costs, including employee overtime, he said.

Possenti said he saw only good in Wansacz's bill, particularly for distressed towns with little in their coffers.

Under the Flood Grant and Assistance Program, individuals would be eligible for loans of up to $10,000. Businesses could get loans or grants of up to $20,000.

Grants up to $250,000 would be available to municipalities. To qualify, they would have to be in a county where flood damage exceeded $3 per capita. The community would also have to match 40 percent of the grant, and use all of the money for essential infrastructure or public recreational facilities.

Under the bill, McGinty said, the state would be able to triple to $30 million a year for the next three years the amount it spends on large flood-protection projects, such as repairing levees and reinforcing reservoirs. Funding for smaller community grant programs could double, she said, from $3 million a year to $6 million.