State and Local Homeland Security: Finding the Right Funding Formula

Congress, of course, initially answered that question by requiring that each state receive 0.75 percent of total SHSGP funding, each territory receive a check for .025 percent of overall funding and the remainder be distributed based on population.
“The first debate was that we weren’t spending enough on the first responder community. The second part of the debate was that the money was not getting out quick enough. And now the final part of the debate is that it’s not being spent wisely,” Asa Hutchinson, the former under secretary for border and transportation security at the Department of Homeland Security, told HSToday. “The latter point is where we should have been in the first debate.”
Certainly Rep. Carolyn Maloney (D-NY), chair of the Democratic Task Force on Homeland Security, didn’t agree with that formula strategy. The original dole, she noted in September 2003, meant Wyoming got $9.78 per person for homeland security, while California received only $1.33 per citizen and her home state cashed in at just $1.40 per resident.
Then there are proposals from players like the US Conference of Mayors’ Homeland Security Task Force. While the federal government has doled out billions of dollars for military activities abroad, it has left an “unfunded local mandate” for the US cities directly responsible for defending its residents and infrastructure, Baltimore Mayor Martin O’Malley complained in Government Executive magazine. The Task Force’s conclusion: DHS should bypass state levels and pass out more money directly to cities.
Chalk up this parsing to politics, plain and simple. “As long as it’s a political environment in Washington, it will always be up for debate,” said Hutchinson, who is currently the attorney heading the homeland security practice group at Venable LLP in DC. “And if experience tells us anything, until the larger cities get 100 percent of the funds, they’ll always say it needs to be more effectively allocated,” he chuckled. Yet he too supports the latest bent: risk-based funding allocation.
Even Rep. Chris Cox (R-Calif.), chair of the House Permanent Select Committee on Homeland Security, has gone on record saying, “This should be all about national security, and less about pork and politics. Right now, we’re using funding formulas that look more like a highway bill.”
In his 2006 budget request, President Bush proposed a change: Good-bye population-based funding, and hello threat-based funding. The administration would like to see states compete for money by demonstrating—through state-generated security plans—how their homeland security needs are in line with national preparedness goals.
The budget proposal also outlined a new grant program to supplement state, local and private critical infrastructure protection efforts, including development of nuclear and chemical materials detection capabilities, as well as protection of ports and other transportation facilities. It also kicked up the funding to its highest notch ever for the Urban Area Security Initiative, which targets 50 cities that face a high risk of a terrorist attack.
Bottom line: The new formula suggestion means each state and territory would see a baseline of 0.25 percent of overall funding, and the remainder would be distributed to areas based on risk, threat, vulnerability and needs. Sen. John McCain (R-Ariz.) has said that if it means his state gets fewer funds, well, that’s OK. Arizonans will understand. It’s a rare politician who can be so sanguine about money for the home state.
A new funding formula would mean new winners and losers. Across the country, homeland security officials are asking what it will mean for them.
The all-risk approach
What would a distribution based solely on risk and threat look like? It’s a question that Jeffrey Addicott, director of the Center for Terrorism Law and a professor at St. Mary’s University School of Law in San Antonio, Texas, has confronted.
In his assessment, the Al Qaeda network has indicated it’s more interested in striking the traditional, expected targets. He would distribute cash based solely on risk assessment—and that pretty much leaves out cities and states as beneficiaries.
“It’s too big. You’re just spending a lot of money that has ‘pork barrel’ written all over a lot of it,” he explained. “Sending the money down to the very local level where people use it to do a couple of training courses and buy equipment is good, but I’m not sure it’s the best way to use that money.”
Addicott—who spent 20 years in the military with Special Forces—would pour money into the military and law enforcement outside the United States to keep the terrorists off-balance—i.e., antiterrorism as opposed to counterterrorism. He’d see that the Federal Bureau of Investigation receives the cash it needs to break up sleeper cells. He’d pump cash into organizations like the FBI’s Terrorist Screening Center, so that when a cop in, say, Oklahoma City pulls over a suspect, he could run the name through this national database on the spot. “Some of the Sept. 11 terrorists were stopped on traffic issues. We have the technology to feed a name into the computer and kick it back with instructions saying this person is a level one, two or three threat—detain them. That’s the information we really need to stop them before they strike,” he said.
And education finds a place in Addicott’s scenario. For example, money to at least pay for airline tickets when experts like himself—he’s the senior advisor for the Guantanamo Bay tribunals—answer Northern Command’s request for law schools to help them establish legal templates on how to approach this style of fighting under the rule of law.
“Guess how many law schools raised their hands? We’re it. Not Yale, not Harvard—the silence was deafening,” said Addicott. “Money on the table would interest them, because then it wouldn’t be about patriotism so much.” It would also get more of his colleagues into meaningful dialogue, he pointed out, as opposed to his current conversations in which lawyers demonize the PATRIOT Act, but can’t cite what’s in it. He estimates $5million would get that ball rolling.
A way out
Rick Wimberly, director of homeland security at Dialogic Communications Corp. in Franklin, Tenn., considershimself a bystander when it comes to the funding debate. He’s not convinced the current system is broken. But he spoke confidently when asked about the wrangling: “I’ve worked with public safety for 15 years and never have I seen as much cooperation on a regional level. A lot of good cooperation is a perfect ‘no’ to politics, and the practicalities of the region’s diversity still come into place,” he said.
For instance, he helped the Capital Area Council of Government in Austin, Texas, establish a regional notification system so that 10 counties could pull together as one unit in an emergency. In Connecticut, Dan Warzoha, the Greenwich fire department chief (see sidebar), proudly explained how his town is pushing for regionalize HAZMAT teams with towns in New Jersey, New York and Massachusetts. The goal eventually is to stretch from Portland, Maine, to DC with this model of squad units ready to respond anywhere there’s an issue in those states.
It boils down to neighbor helping neighbor, as Wimberly sees it. “You have to say to Congress, ‘Hey, get your act together,’ because the worst thing that can happen is all of these controversies delay getting this money into the hands of the people needing money.”
When there’s money on the table, you can bet the parties seated around it won’t agree on how to divide it. And when it’s the federal government’s call, the danger of seeing that money wasted to advance personal political ambitions at the expense of, say, homeland security, is always present.
Secretary Chertoff clearly favors risk-based allocations. He has said as much in congressional testimony and in public statements. This year will show whether he can convince what is shaping up to be a very contentious Congress that it should carve the pie on the basis of “threat, vulnerability and consequence.”
When it comes to the states and localities outside high-risk areas, no one should be begrudged his fair share of the budget. While no perfect solution exists, perhaps the most constructive one is for the Department of Homeland Security to set out minimum requirements and guidelines for a cohesive national plan, make monies available in equal portions, and then trust Yankee ingenuity and the American spirit within the states and cities to produce workable solutions.
After all, cash can’t solve everything. At some point, necessity has to be the mother of invention, and the states and localities have to propel themselves to the next level of protection. 

In the Northwest, folks take a practical stance. Brett Lloyd, the counter-terrorist planner for Helena, Mont. (whose salary, paid for with SHSGP dollars, runs out in November), doesn’t wake up expecting an attack to occur within his borders, “but we don’t want to be the state that lets terrorists into the country.” And with 550 miles of border to secure and a tiny population of 926,865 in a vast 145,552 square miles of territory to start with, homeland security forces here fear it’s just too easy for any bad guy to slip in on a snowmobile. This vast wilderness already carries a reputation as a haven for the less-than-law abiding; they’re still living down the Freeman standoff from 1996, when a handful of militants on a ranch declared themselves an independent country, and few have forgotten that the Unabomber turned up in Montana.
“What concerns us is, if our funding is significantly cut, it will make it that much more difficult to not only maintain our programs but also to provide the added support to protect those populated areas,” Lloyd concluded. In other words, this land is my land, this land is your land.
SHSGP money has bought Montana the backbone infrastructure for a P25-compatible interoperable communications system, but the state still needs additional radios, and officials need to maintain the equipment. They count heavily on federal funding toward that end. Lloyd also said the training and exercise programs would be difficult to keep upto date without outside money—after all, sparse population means these costs look huge when paid by taxpayers.
In Montana, cooperation is a necessity for towns that are long distances apart. So in a strange way, a lack of funds spawns a more creative approach among resourceful people. “There’s not a community in rural America that has all the resources of personnel they need to handle a significant event,” Lloyd admitted. “Mutual aid contracts with our neighbors are a way of life for us. It’s forced us to communicate better amongst ourselves.”
Lloyd can’t see Montana faring much better than it already has. Frankly, he said, funneling money directly to the cities there “would put a terrific administrative burden on a lot of those local communities. We have a lot of counties whose emergency management structure is filled by a part-time person, sometimes as little as a quarter-time person.”
If he were in charge of all homeland security, he would abandon fortified city-states in favor of a broader nationwide approach—one that values protecting the borders and port areas, of course.  “We need to focus the funding on the real risks and threats, not who has the best lobby. I’m afraid a lot of these changes are coming because areas have stronger lobbies, not so much that they have a more significant threat,” Lloyd added.
“I won’t dispute the fact that some place like New York City or Denver probably has a greater risk of being attacked, but on a nationwide threat level, we need to look at the borders and ports,” he stressed.

Many Americans associate Oklahoma with rodeos, the National Cowboy and Western Heritage Museum and an occasional Class-5 tornado in the spring. When John Nance describes his state, he talks about McAlester Army Ammunition Plant, which makes most of the bombs used in Iraq. Tinker Air Force base creates most of the aircraft engines for the war effort. It’s a hub for oil products, and home of the main Army artillery depots.
Oklahoma City is only a few hundred miles, in Nance’s estimation, from the Mexican border, smack in the NAFTA corridor running up I-35. And 10 years ago in April, the city was the unforgettable site of a domestic terrorist attack when Timothy McVeigh and company blew up the Alfred P. Murrah Federal Building one sunny morning.
So Nance, a former criminal investigator for the US Treasury and now a representative in the Oklahoma legislature, as well as a reserve deputy sheriff, takes his homeland’s security issues personally. For instance, he’d like to see an upgrade to a Cold War bunker with 18,000-pound doors designed to stand a nuclear blast that city officials discovered on the capital complex.
Without the upgrade, this “tool” is “like flying a DC-3 in a war today. It just wouldn’t work,” he said. “The legislature, in my opinion, isn’t concerned with how dangerous the world we live in really is, and how important it is for us to be prepared.” In this case, homeland security has offered a chunk of the money, if Oklahoma chips in approximately $700,000. So far, the Sooner State can’t ante up its share.
Oklahoma also lacks a statewide 800 MHz communications system—equipment Nance said law enforcement officials were trying to figure out how to purchase 20 years ago. Then there are things that don’t fit neatly into the federal funding program’s boxes, like the emergency medical system. In Oklahoma, individual companies hospitals or ambulance services own this equipment, instead of the fire departments or municipalities, so they are excluded from receiving funds. “Most of the municipalities that maintained them in the past haven’t been able to afford them. Sometimes I think there’s just too many restrictions of the federal money fitting the round peg into the square hole,” Nance said. 
As for the usual suggestion of having citizens raise a ruckus to spur politicians into caring about them—well, Nance faces a unique psychological barrier. The Oklahoma City bombing left scar tissue on the heart of the state. “People want to move on. They don’t want to hear any more,” he noted. “They don’t even realize we’re at war, I think. That’s way off somewhere and who cares? We’re a nation of instant gratification that’s more worried about $2 gas than problems of fighting terrorism. And so it goes to the back burner.”
If Oklahoma’s John Nance were in charge of DHS, he’d start not with funding formulas but at a more basic level.  He’d simplify the process by stripping all the categories, forms in triplicate and other paperwork hoops. “It’s just too complicated,” he said of the current system. “Trust the people on a local level to know what they need and be able to tap into these funds.”

Dan Warzoha, the fire department chief for Greenwich, Conn., can sympathize with Montana’s Brett Lloyd, especially since he sees himself in the same pinch, but for opposite reasons. Greenwich is the first train stop out of New York City, home to Wall Street moguls, movie stars and other target-rich amenities.
“We had thousands of our own residents come back from 9/11 covered in stuff and in shock,” he recalled. Thirteen of his residents were among the dead memorialized on plaques at the World Trade Center site. Weeks later, 37 Greenwich residents who worked at the NBC building in the Big Apple were involved in an anthrax attack on the network: “They marched right up to our local hospital and almost put that place out of service because of possible contamination.”
“We’re on the edge—whatever happens in New York has an immediate impact with us,” he added. So the city purchased a $680,000 hazardous materials and command vehicle. It funds a 97-member HAZMAT team.  It owns a $127,000 mass decontamination trailer outfitted with gowns, garments and all the accoutrements. Meanwhile, the SHSGP funds for ’04 totaled $450,000; Warzoha expects $221,000 in federal funds in ’05.
That means local taxpayers coughed up between $7 million and $8 million since Sept. 11, 2001, for homeland security. “We feel strongly about the threat-based scenario,” says Warzoha. “Certainly, there are communities where stuff could happen, but when you’ve already had it happen with your own constituents, it’s certainly very clear where the dangers lie.
“Those of us who were involved in Sept. 11 know what’s got to happen,” said Warzoha.

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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