No clear path for flood relief in Virginia

When Gov. Glenn Youngkin visited Buchanan County earlier this month to view the destructive path left behind by yet another bout of violent flash flooding, he vowed to aggressively seek federal aid to help the battered locality to recover from the second such disaster in less than a year. Most notably, Youngkin emphasized the need to pursue longer-term recovery efforts on the state level. “There’s a lot of work to do, a lot of hard times ahead, I think,” he said. “Now we’re going to have to rebuild, and the state’s going to do everything that we possibly can do to help.”

But freeing up more cash to help Virginia communities hit most hard by extreme weather events is easier said than done – even during times of a historic budget surplus. Such a effort faces not just bureaucratic hurdles but also would have to take into consideration other localities competing for money, particularly in the coastal regions, that have been pushing to fund costly flood prevention measures to combat the rising sea tides.

Another complicating factor is the fact that Virginia’s existing flood fund programs are largely dependent on money from the Regional Greenhouse Gas Initiative (RGGI, pronounced “Reggie”), a cap-and-trade program in the Northeast and Mid-Atlantic that places a limit on electricity sector emissions. In December, just a month after his election, Youngkin made known that he would withdraw Virginia from RGGI via executive order – a move that he has begun implementing since taking office. 

Virginia formally joined the list of RGGI states last summer. Together, the 11 member states set an enforceable regional limit on the amount of carbon pollution that power plants are allowed to emit and sell pollution permits up to this limit through quarterly auctions. 

RGGI’s design requires large fossil fuel power plants to buy the pollution permits, and the number of permits is lowered each year, so that the region’s power plants contribute progressively fewer emissions to global warming. Auction proceeds are used to generate local and regional economic benefits, including investments in local businesses that provide jobs for residents, weatherization of homes, upgrades of heating and air-conditioning systems, and clean, renewable energy.

“As energy costs increase on Virginia families, Governor Youngkin will continue advocating to lower the cost of living for all Virginians by eliminating policies like RGGI that drive up energy costs on Virginia consumers and impose an unnecessary carbon tax on Virginia’s ratepayers,” Youngkin spokeswoman Macaulay Porter said in an email last week.  

Instead, Youngkin is “working with federal, state and local officials to deliver resources that support families” impacted by the flood. “Resiliency is a priority for the governor and he is committed to significant new strategic and coordinated investments leveraging available federal and state resources,” Porter said, without providing further details. 

Before Virginia joined RGGI, there was practically no state funding going into flood protection and resilience. The Dam Safety and Flood Preparedness Fund, administered by the Virginia Department of Conservation and Recreation, was the only state program that provided funding for flood protection. All other flood protection funding prior to RGGI came from the federal government and was usually linked to a disaster.

But even federal disaster aid is often denied, especially when a request does not meet Federal Emergency Management Agency (FEMA) standards. After flash flooding and a mudslide damaged or destroyed dozens of homes in the community of Hurley last August, FEMA turned down a request for aid for people who had lost their homes, telling then-Gov. Ralph Northam that the damage “was not of such severity and magnitude” to warrant the assistance. 

The state appealed the denial, but to no avail. “After thorough review of all the information contained in your initial request and appeal, we reaffirm our original findings that the impact to the individuals and households from this event was not of such severity and magnitude to warrant the designation of the Individual Assistance program,” FEMA administrator Deanne Criswell wrote to lawmakers in January. 

And Virginia’s two fairly new flood funds are aimed at supporting flood prevention efforts rather than dispensing financial aid in response to disasters. 

The Community Flood Preparedness Fund (CFPF), a statewide grant and loan fund set up in 2020 to provide support for regions and localities across Virginia to reduce the impacts of flooding, uses money from RGGI. Virginia is the only member state in RGGI to have such a fund, and to date more than $170 million has gone into the fund from RGGI. 

The money is being used to not just fund the Department of Conservation and Recreation planning work and flood master plan work, but to also fund actual projects in cities and counties. In 2021 Buchanan County was among the first localities to receive a $387,000 grant to help communities like Hurley avoid future disasters with planning and remediation projects. The Lenowisco Planning District in the far Southwest also received a $150,000 planning grant in the second funding round. 

The Resilient Virginia Revolving Loan Fund – the state’s second flood fund – was created during the 2022 legislative session earlier this year. It is a loan and grant fund for revolving loans to localities to deal with flood problems in addition to pass-through loans to private property owners for work on their lands. This fund was given $25 million diverted from the CFPF in RGGI money to get started. But under this legislation, these funds cannot be used for post-hazard mitigation because its definition of “project” does not cover disasters.

After last year’s flood in Buchanan County, Del. Will Morefield, R-Tazewell County, filed legislation that sought to create a designated fund for flood victims, funded by 5% of Virginnia’s annual RGGI proceeds. 

In its original version, Morefield’s House Bill 5 would have made relief money available to any property owner whose claims were denied by insurance, as well as to those who don’t have insurance, once a locality or region is declared a major federal disaster area. Flood victims could have claimed up to $1 million for commercial properties and $500,000 for residential properties. The payouts would have been exempt from individual and corporate income tax.

But less than 24 hours after Morefield filed his legislation, Youngkin announced his plan to exit RGGI, putting the potential success of Morefield’s original proposal at risk. During the legislative session in February, the House Committee on Agriculture, Chesapeake and Natural Resources tabled the bill at Morefield’s request, after he had determined “a clearer path in securing relief for the residents Hurley,” as he told Cardinal News later that month.

Instead of tapping into RGGI resources, Morefield worked with lawmakers to free-up a total of $11.4 million in relief money to benefit flood victims in Hurley through the budget process – a proposal that Youngkin signed in June. 

However, Morefield’s original legislation also included a provision that would transfer $50 million of any unobligated proceeds from the RGGI allowance auctions to support the flood relief fund in the case of Virginia’s withdrawal from the initiative. “Unobligated proceeds would be the funds available that have not already been committed to the approved projects that RGGI currently funds. There would be enough funding available to create the fund if Virginia remains or does not remain in RGGI,” Morefield said Monday.

Skip Stiles, the executive director of the Norfolk-based nonprofit Wetlands Watch, said that despite his group’s empathy for the people affected by the flood, they were “really conflicted” about Morefield’s original plan, because it would have taken money from flood prevention efforts. “The RGGI money is supposed to be used to plan for and prevent future floods, not react to current ones. If this becomes an emergency relief fund, we’ll be playing catch up forever, responding to yesterday’s flooding and falling farther behind the increasing rates of rainfall,” Stiles said.

And if Youngkin’s planned withdrawal from RGGI succeeds, the state will have to find other means to pay for both flood protection and disaster relief, Stiles said. “If he wants to divert this funding to react to emergencies, we’ll never get ahead of the problem. The problem will get worse,” he said, citing data from the Mid Atlantic RISA showing that actual rainfall numbers for Buchanan County for 2022 have already exceeded the original estimate from last year by 18%.

“The bottom line is that what we’re seeing is just the start of more rainfall and more intense rainfall,” Stiles said. The $300,000 that the state spent on flood prevention in 2020 before joining RGGI was nowhere near enough to pay for flooding relief and deal with the rainfall that is expected to increase. “We need to get ahead of this wave, and the only way is to stay the course with the CFPF, do the planning and project work, use the RGGI money, and spread it outside of the coastal zone to the valley and Southside areas,” Stiles said.

Youngin, however, doubts the RGGI’s usefulness. In March, his administration released a report that concluded that the initiative “operates as a direct tax on households and businesses because all fees paid to the RGGI Board are passed through to utility-captive ratepayers.” The report also stated that the imposition of the RGGI carbon tax “fails to offer any incentive to change behavior” as current law allows power generators, such as Dominion Energy, to “pass on all their costs, essentially bearing no cost for the carbon credits.” 

Environmental groups, however, have argued that the report proves the opposite and that RGGI plays a significant role in the reduction of carbon emissions.

After a withdrawal from RGGI – and without a plan to pay for a designated flood fund – Youngkin will have to own the problems that are likely to occur from the damage caused by a rising number of flood events. In June, he vetoed legislation that would have transferred administration of the CFPF from the state’s Department of Conservation and Recreation to the Virginia Soil and Water Conservation Board, keeping the agency’s responsibilities within the executive branch, as opposed to a citizen body working with the state’s soil and water conservation districts and other stakeholders. 

With or without Virginia’s participation in RGGI, the state will have to come up with a designated flood fund one way or another, said Travis Staton, president and CEO of United Way of Southwest Virginia. “The governor has the best interest in mind for Southwest Virginia and all Virginians, and anything that his administration can do to support us, we are open and willing to support these efforts,” he said.

And most people don’t realize the financial impacts of these disasters, not only in the short term, but in the long term, Staton said. “It is extremely worrisome,” he said, adding that providing relief to the victims of last year’s flood in Hurley faced several delays, caused by the FEMA denial and the state’s budget amendment process that dragged out into June.

“A challenge like this impacts people, and you have monetary loss, but you also have to think about what else is there in that cost, from infrastructure, water and utility lines, county personnel working, and people not being able to work because they are cleaning mud out of their home, not even mentioning the trauma of children being rescued from their homes with rafts,” Staton said. After two major flood events within one year, the people in Buchanan County are “physically and mentally exhausted.”

Morefield, the delegate from Tazewell County, still hopes that his flood fund legislation will open the door to the creation of a more permanent solution to help flood victims. And unless Virginia finds a way to establish a statewide flood relief administratively before the next General Assembly session, he said he plans to reintroduce his proposal in 2023. 

“Establishing a state flood relief fund is desperately needed, especially in economically distressed localities. Most homeowners cannot afford flood insurance and like we saw in Hurley most people have no form of insurance,” Morefield said.

Redirecting 5% of the yearly RGGI proceeds or – if Virginia withdrawals from RGGI – $50 million dollars of unobligated proceeds is a small ask for something that could provide potential relief to flood victims across the commonwealth for decades to come, Morefield said. “HB5 was drafted to allow for unused proceeds in the fund to be invested and grow interest, which in turn would help extend the life of the fund,” he said.