Flood insurance subsidies ending, frustrating many in midstate

Written by Ben Allen, General Assignment Reporter | Feb 24, 2014 4:00 AM
Flooding following Hurricane Sandy

(Harrisburg) -- Many people in the midstate are questioning a 2012 federal law that gradually removes government subsidies for flood insurance.

The Biggert-Waters Act is designed to help erase a $24 billion deficit in the National Flood Insurance Program caused by Hurricane Katrina and Superstorm Sandy.

Property owners are scheduled to face 25% rate hikes every year until they are paying fair market rate for the insurance.

It's an issue that snuck up on many in the midstate, after working it's way through hearings and votes in Washington, D.C.

"So it didn't necessarily rise to the level of anybody's radar screen at the time, but that now that we're really seeing the impact of the implementation, it's really all opened our eyes to how it's going to play out," says Lisa Schaefer, Director of Government Relations for the County Commissioner's Association of Pennsylvania.

Schaefer says federal lawmakers should pass a four year delay on the rate hikes, so the Federal Emergency Management Agency can study the potential the changes may have on communities.

The Senate has already acted, but the House is showing hesitancy.

The White House says any further delay will only threaten the National Flood Insurance Program.

Dauphin County Commissioner Jeff Haste notes the midstate will be hit hard if high rates force drastic changes.

Flooding following Hurricane Sandy

He uses the Steelton Highspire School District as an example.

"If 32.5% of the community needs to move, both communities are landlocked. So when they move, that means they're moving out of that school district. What's that do to the school district? Probably bankrupt."

Haste and others say they expect people will just move to an area that isn't impacted, depriving some districts of much-needed property tax revenue.

"The government years ago decided to subsidize flood insurance and to sort of push the private sector out of it. And now the government saying guess what, we made a mistake, we're backing out of it, sorry taxpayer you're out on your own? That's not fair either."

But, solutions seem hard to come by. Just ask Lisa Schaefer.

"Then you necessarily have a discussion, who should bear the cost of mitigating that risk? Is it the property owner? Is the community? Is it both? And to what extent, if it is both."

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