Modeling Intergovernmental Fiscal Impacts of Coastal Hazards

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This Disaster Resilience Research Grant (DRRG) project contributes to the advancement of national health, prosperity and welfare by creating new knowledge on how coastal storm and flood events affect municipal finances. Disasters may cause fiscal distress for local governments when revenues shrink and expenses grow, thereby affecting their ability to provide adequate local public services such as policing, public works, and education. The extent of local distress depends in part on what other actors do, including local property owners and higher levels of government. This project collects twenty years of New Jersey data from property tax records, municipal budgets, and state and federal budgets to create a fiscal impact model; uses a phone survey of coastal residents and focus groups with public officials to create a behavioral model; and joins them to support the deliberations of a stakeholder group based in coastal New Jersey. This group will explore ways to incentivize more effective management of coastal hazards and increase transparency about how coastal storm and flood events affect municipalities. Better risk management in coastal areas depends in part on re-aligning the incentives experienced by households and local jurisdictions by changing the rules of the intergovernmental public finance. This project extends the method of Fiscal Impact Analysis, a widely used method to assess the local fiscal impacts of land use development proposals, to the situation where coastal hazards cause local fiscal impacts. It also develops a novel agent-based model of intergovernmental fiscal relations to allow strategic exploration of alternative incentive structures. The project integrates these two tools into a simulation modeling system that can support stakeholder deliberations about more protective coastal risk policy. More broadly, the project will help local decision makers to mitigate fiscal stresses from adaptation decisions outside the municipal sphere of influence. From an equity perspective, it serves fiscally distressed coastal communities that often have vulnerable residents residing in the flood plain.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.