After the deluge: South Carolina gets lesson in federalism

 Published December 8, 2015

South Carolina’s Republican congressmen and two senators received a well-deserved lesson in the value of being part of a large nation that can bring financial muscle to bear on disasters that can wreck the economy of any state left to its own resources.

These men elected to help run the nation as well as represent the state voted against the rescue legislation for New York and New Jersey in the wake of Hurricane Sandy in 2012, grousing peevishly that too much of the money in the bill was going to states not impacted by the storm.

Now, since an early October storm visited floods and the state’s greatest modern disaster on South Carolina, these same men are pledging that they’ll get whatever is needed from Congress to repair the state’s soggy, flood-ravaged landscape.

“Whatever it costs, it costs,” U.S. Sen. Lindsey Graham told CNN.

Perhaps these ideologues will be more compassionate toward future needs in other states. We can only hope that members of Congress do not punish the stricken citizens of South Carolina for the lack of empathy displayed by their representatives toward New York and New Jersey.

The need in South Carolina is great. By Monday, Dec. 7, 2015, some 24,489 applications for FEMA assistance already had been approved for assistance totaling more than $71 million. Some $15 million is providing public sectors assistance. Those numbers will grow significantly as more and more affected people have a chance to apply for assistance.

A broad swath of South Carolina has been laid waste, including farmers’ crops, people’s homes, commercial businesses, and the state’s already under-maintained transportation system. We desperately need the help of the nation, much as Louisiana needed assistance after Hurricane Katrina and the Atlantic states needed a helping hand after Hurricane Sandy.

Fortunately, the Obama administration has moved quickly to marshal federal resources in support of South Carolina. The Federal Emergency Management Agency, a unit of the U.S. Department of Homeland Security, already is setting up field offices in the state. The Secretary of Homeland Security, Jeh Johnson, was in South Carolina talking to officials and surveying the damage within days of the flood. FEMA has about $6 billion available in its disaster fund already, but a special appropriation is expected to ensure that South Carolina’s disaster relief needs are met.

Sen. Graham and other S.C. representatives have pledged to submit such a special bill to Congress.

Meanwhile, substantial federal resources have been hard at work since the first sign that the region would experience unprecedented floods from 26 inches of rain that fell across the Midlands. The South Carolina National Guard, largely funded by Congress, has deployed its people and machines to rescue stranded residents from flooded homes and to help civil officials with emergencies such as the breach in the Columbia canal, where the city gets most of its water supply.

As FEMA representatives fan out across the region, checks will be written to help desperate people with short- and long-term housing needs, and to begin repairs on their damaged homes. People who did not have flood insurance can receive grants up to $33,000 to begin repairs on their houses. The grants have strings of course, but not unreasonable ones. Recipients of the grants will be required to sign up for flood insurance to protect them against future flooding.

Federal law also provides other measures to help flooded citizens get back on their feet.

Walda Wildman, a Columbia CPA, notes that citizens with significant uninsured losses in the flood may benefit from a provision in the tax code that allows those living in federally designated disaster areas to amend their prior year’s return to deduct those losses. The provision means a taxpayer can amend his or her 2014 return and won’t have to wait to file a 2015 return to “benefit” from the deduction. Like the rest of the tax code, this is not necessarily simple, so everyone impacted should seek tax advice about the benefit and how to file the required forms.

Amending 2014 applies only to 1040s, Wildman said.  Some 1040s do, however, report income from businesses so it is worth consulting a tax advisor regarding the specifics of the situation.

“My concern is only to get the word out so that those affected will know their options.  This is complex.  IRS Publication 547, Casualties, Disasters, and Thefts, covers the rules,” Wildman said.

The federal Small Business Administration also will be a player, offering loans to flood-damaged individuals and businesses.

Businesses and private nonprofit organizations may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory, and other business assets.  The SBA may increase a loan up to 20% of the disaster damage to real estate and/or leasehold improvements, to make improvements that lessen the risk of property damage by future disasters.

The private sector also has stepped up to assist flood-stricken South Carolina: BlueCross BlueShield of South Carolina has donated $1 million for flood relief; Wells Fargo, $300,000; Boeing, $100,000; and AT&T, $50,000. More private money will follow.

And South Carolina lawmakers, particularly those who represent the Midlands, are talking about a special session of the General Assembly to take up a flood relief appropriation bill. Reps. James Smith and Rick Quinn, a truly bipartisan team, are proposing various measures to provide the state’s share of disaster relief, including a bond bill and use of surplus funds. A bond bill makes sense; interest rates remain at all-time lows, and borrowing the money would be the quickest way to restore damaged infrastructure.

The Republican dominated General Assembly and Gov. Nikki Haley have blocked efforts to use debt as one of state government’s tools to meet the people’s needs, but there is a time and a place for everything. It is time for these officials to lead, and to provide the vital resources to restore South Carolina flood-ravaged structures by whatever means necessary.

Shared responsibility and shared sacrifice are good virtues, in personal relationships as well and government commitments. South Carolina benefits daily from its membership in the United States of America. This state’s representatives in Congress need to remember that when called upon to help others as well as during this great crisis brought by historic flooding across the region.

Reach James T. Hammond by e-mail at jthammond46(AT)gmail.com.