commentary

(Los Angeles Times)

August 20, 2006

Mississippi Comeback

by George D. Penick and K. Jack Riley

Out of the spotlight, the state is making all the right rebuilding moves.

Hurricane Katrina caused as much devastation and human suffering along Mississippi's Gulf Coast as it did to New Orleans. It was the worst disaster to hit the state since the Mississippi River floods of 1927 and the Great Depression that soon followed. Katrina's powerful winds and floodwaters claimed 231 lives statewide, caused more than $100 billion in damages and destroyed buildings, crops and livestock as far as 100 miles inland.

The rebuilding of Mississippi's Gulf Coast has received far less media attention than New Orleans' reconstruction. Recovery has been hard, and although there has been progress, much remains to be done. But Mississippi appears to have done more things right than wrong.

The chief lesson of its rebuilding experience is that if you have limited funds and other resources, simply spending money on the myriad problems of disaster recovery is not enough. Spending should be guided by research and analysis, not guesswork and politics.

After the hurricane, state government leaders, the business community and nonprofit organizations quickly realized that the pace of rebuilding needed to be the top priority if Mississippi was to recover in a matter of years rather than decades.

The first order of business was to rebuild Mississippi's casino industry as quickly as possible because it is a major employer and revenue source in the state. A special session of the Legislature called by Gov. Haley Barbour allowed casino owners to rebuild on shore instead of on floating barges, making them better protected from future storms. Otherwise, the casino owners had little incentive to spend the hundreds of millions of dollars needed to rebuild.

Katrina wiped out nine of 10 casinos in Biloxi, with the surviving one severely damaged. Currently, five casinos on the Mississippi coast have reopened, and two more are scheduled to restart business operations later this month. In June, gross gambling revenue in those casinos was $65.1 million, and total revenue is expected to jump when the additional casinos come on line. On Aug. 29, the first anniversary of the hurricane, the Beau Rivage Resort & Casino will reopen, creating 3,800 jobs.

The rebuilding of homes and communities is much harder. The contributions of government officials at all levels and volunteers were necessary to understand the challenges, set priorities and then find ways to solve the problems.

In the immediate aftermath of Katrina, Barbour created the Governor's Commission on Recovery, Rebuilding and Renewal, which was mostly privately funded. Its report, completed in little more than 100 days and issued at the end of 2005, drew widespread support from the public and the business community.

It principally called for better cooperation among Mississippi's counties on such regional issues as water management, maintaining the human scale of coastal living and new regulations to ensure the construction of affordable housing in the Gulf region.

Compared with Louisiana, where state and local government did not communicate or work well together, Mississippi officials formed a united rebuilding team. Barbour, Senate Appropriations Committee Chairman Thad Cochran (R-Miss.), former Senate Majority Leader Trent Lott (R-Miss.), members of the state's congressional delegation and local officials joined forces. The Washington experience of Cochran, Lott and Barbour, former Republican National Committee chairman, certainly benefited Mississippi.

Rebuilding and repairing Mississippi's housing was also a top priority. Katrina damaged 134,000 homes in the state, including 65,000 that were destroyed. It's a daunting task. Even if the recent rate of roughly 500 housing permits a month in the state's six coastal counties were tripled, it would take almost 10 years to get displaced people out of temporary housing.

Last year, only 2,800 houses were built in the state. So far, rebuilding is proceeding at a slow pace. Barbour has also created a housing council, made up of public and private interests, to ensure that affordable housing is built in the Gulf region. One approach relies on modular housing, which keeps costs down and speeds up reconstruction.

The federal government is encouraging the private sector to participate in the recovery of the Katrina-affected areas. Congress passed, and President Bush signed, legislation providing incentives for investment and new business development in all Gulf Coast counties hit by the hurricane.

Deposits in Mississippi's banks greatly exceed the pre-Katrina levels because of insurance payments, and they will grow as Mississippians receive federal reimbursements for storm damages, providing cash for rebuilding. The recent Governor's Recovery Expo attracted large numbers of businesses and residents eager to begin rebuilding.

Mississippi leaders from the public and private sectors know that acting on the spur of the moment may be justifiable in a short-term emergency but unwise when challenges are long-term, when decisions will have lasting effects, and when spending on the wrong programs can slow down recovery and waste precious dollars.

Yet the pressure to rebuild quickly after a disaster is great. Individuals who can't wait may forfeit insurance reimbursement or violate federal, state or local building codes.

Similarly, communities may discover that their rebuilt roads, bridges, utilities and water systems are far more expensive than they would have been if they had planned and researched the projects.

Whether dealing with hurricanes along the Gulf Coast, earthquakes in California or other natural or man-made disasters elsewhere, it makes sense to devote a small portion of rebuilding money to lay out a path to recovery that will bring the greatest benefits.

This takes time and effort. And it takes a time horizon that stretches not just to next month or next year, but to the next generation and beyond.

Mississippi is working hard to learn this lesson.


George Penick is director of the RAND Gulf States Policy Institute. K. JACK RILEY is associate director of the Infrastructure, Safety, and Environment division of the RAND Corp. The institute is helping guide Mississippi's rebuilding program.

This commentary originally appeared in Los Angeles Times on August 20, 2006. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.