Kan. Lawmakers: More Help Needed in Disaster Areas

September 27, 2007

Lawmakers need to help pay for replacement housing and assist businesses that want to locate in areas devastated by tornado and flood damage, two legislative leaders told a legislative committee Tuesday.

Senate Majority Leader Derek Schmidt and House Majority Leader Dennis McKinney told the Special Committee on Assessment and Taxation that survival of the towns in disaster areas depends on rebuilding their local economies _ which means people have to live there.

“It will cost a little bit now to get these communities on their feet or a lot in the coming decade to pay for the economic decline,” said Schmidt, an Independence Republican whose hometown and much of his southeast Kansas district suffered massive flooding this summer.

“From a state standpoint, there needs to be a discussion about the long-term health of regional communities,” he said.

McKinney, a Democrat whose hometown of Greensburg was all but wiped away by a May 4 tornado, said many people can’t afford to replace their homes. He said many homes purchased years ago for between $20,000 to $40,000 now would cost $100,000 or more to rebuild.

“Without adequate housing we will lose many of our citizens, our work force to neighboring communities or in the case of southeast Kansas to neighboring states,” McKinney said, adding Greensburg lost up to 95 percent of its tax base because of the tornado.

McKinney and Schmidt said the Special Committee on Disaster Relief, on which they serve, will have proposals next month. Any recommendations from either it or the tax committee are likely to be considered when the Legislature reconvenes in January.

Schmidt said one unanswered question is how much the relief will cost.

In May, legislators approved tax breaks for business reconstruction in Greensburg, including a sales tax exemption for materials used to restore businesses there. The two legislators said that should be extended to flooded businesses.

They said the state should start a housing grant program. Cities and counties could design programs and the state would evaluate the proposals and award the money.

They also suggested a 10 percent business investment tax credit for two or three years in disaster areas that would include development of multifamily and rental housing. Such tax credits would encourage businesses to rebuild or locate in hard-hit areas, they said.

They said the Legislature should appropriate enough money to allow the state to receive the maximum matching federal funds to assist in the recovery.

Meanwhile, Insurance Commissioner Sandy Praeger said there was $279 million in estimated storm losses for wind storm, tornado and hail damage this year, and the Greensburg tornado accounted for $153 million in damage.

She said the vast majority of Kansans hit by flooding didn’t have flood insurance, and many incorrectly thought standard homeowner policies covered flooding.

Praeger said only 193 flood insurance claims were filed in disaster areas for $3.4 million, and the majority of claims were for single-family dwellings.

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