KBRA releases research on the report published by the President’s Federal Emergency Management Agency (FEMA) Review Council. The report recommends shifting FEMA toward a more supportive federal role, with state, local, tribal, and territorial governments taking greater responsibility for disaster management. It proposes stricter disaster-declaration criteria, faster direct funding, simplified survivor aid, restructured mitigation grants, National Flood Insurance Program (NFIP) reform, and lower administrative costs. If implemented, these recommendations would aim to speed assistance and reduce bureaucracy but could increase fiscal risk for state and local governments. While the Review Council report addresses states, localities, tribal and territorial governments, this commentary discusses several of the report’s recommendations with a focus on the impact on states and localities, as well as recommendations for the NFIP.

Key Takeaways

  • The Council’s recommendations align with the administration’s approach of shifting responsibilities and costs from the federal government to states and localities, particularly the principle that emergency response should be “locally executed, state or tribally managed, and federally supported.”

  • The Council recommends replacing FEMA’s current Public Assistance program with a faster direct-funding model called the Reformed and Partnered Initiative for Disasters (RAPID), where FEMA would send money to states soon after a presidential disaster declaration. For cities and counties, the main risk is that faster payments may not fully cover actual recovery costs.

  • The report recommends raising or revising FEMA’s disaster-declaration thresholds and using clearer measures of disaster severity, along with assessing state and local capacity to respond and recover without federal help, which would make it harder for local governments to qualify for federal disaster aid.

  • The Council suggests that FEMA distribute flood-loss and exposure data more widely and that the government reassess the existing Community Rating System incentives to promote local responsibility for risk mitigation.

  • The Council also suggests reviewing the commission structure for private companies that distribute NFIP insurance policies and notes that reducing commissions could save hundreds of millions of dollars in yearly expenses, simultaneously encouraging more private insurers to offer flood coverage and supporting a broader initiative to drive a gradual depopulation of the NFIP using actuarially sound rates.

Click here to view the report.

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