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The Price of Katrina Hospitality

States with evacuees try to add up the costs, but variables persist: How many will stay? Who? 'We never envisioned' this, a Texas official says.

January 01, 2006|Stephanie Simon | Times Staff Writer

Overtime for workers processing a deluge of food-stamp applications. A satellite dish to bring Internet access to a summer-camp-turned-shelter. New textbooks and teachers. Dialysis. Chemotherapy. Security deposits for rented apartments.

As they plan budgets for 2006, officials in Texas, Georgia, Arkansas and elsewhere are first calculating the costs of providing for hundreds of thousands of people displaced by Hurricane Katrina.

They've come up with some daunting numbers -- and questions.

Although they expect reimbursement from the federal government for many expenses, officials say they aren't sure how much they will receive or when the money will arrive.

More vexing for budget planners is uncertainty about the evacuees: How many will stay in their adoptive states, how many will find work and become self-sufficient, how many will continue to need public aid -- and for how long?

Georgia legislators recently warned that medical and education costs could rise $100 million next fiscal year if the 44,000 evacuees in the state decided to stay.

Texas officials say the evacuee population of 400,000 could cost the state as much as $550 million next fiscal year. They're hoping the federal government will step up reimbursement.

"We're not being mercenary about this, but we want to bring it to the attention of Congress and the administration," said Texas Homeland Security Director Steven McCraw. "We want to provide first-class care to our neighbors. On the other hand, we don't want to be disproportionately penalized because we opened our arms....

"We never envisioned, nor had we planned on, taking nearly half a million people into our state virtually overnight," McCraw said.

Even states that have taken in fewer Katrina survivors face challenges, especially with ongoing healthcare needs.

In Nebraska, for instance, the lead agency helping 166 evacuees airlifted from New Orleans to Omaha spent $200,000 to help settle them in motels and to take care of urgent medical problems as diverse as snakebites and depression. The Federal Emergency Management Agency will cover many of those expenditures.

But FEMA will not cover the types of calls Beverly Griffith still gets daily -- from evacuees who don't qualify for state Medicaid insurance but need a cab ride to a doctor's appointment, or pain pills for an aching back, or an X-ray on a swollen arm.

She is director of the Eastern Nebraska Office on Aging, which has nearly drained its reserve fund; Griffith is not sure what she'll do when the money is gone, except keep helping as best she can.

"We don't feel it's right to bring them into our community and then not give them ongoing support," she said.

The federal government has agreed to pay five months of Medicaid insurance for evacuees in several hard-hit states. The federal Treasury will also cover at least several months -- and possibly up to a full year -- of educational costs associated with Katrina evacuees.

Many who stay beyond that point will presumably settle into their new states as productive citizens, paying at least as much in taxes as they take in services.

"I don't see any reason these folks can't be absorbed," said Bernard L. Weinstein, director of the Center for Economic Development and Research at the University of North Texas.

"They are already making purchases, finding jobs, adding to the tax base," said Georgia Gov. Sonny Perdue's press secretary, Heather Hedrick.

But some analysts warn that the new host states can expect swelling social-service caseloads.

"I think it's almost guaranteed that those who stay will be those with the least economic opportunity ... the people who don't have anyplace else to go," said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston.

If, as he expects, the disabled, elderly and impoverished stay in disproportionate numbers, "it will likely put a net burden on the Houston economy for several years to come," Smith said.

The chief executive of Texas' Harris County, which includes Houston, says that a substantial number of Katrina evacuees have chronic medical conditions, such as diabetes, coronary disease or mental-health issues, and require care at public hospitals.

"On balance," said the chief executive, Judge Robert Eckels, the evacuee influx "should be good for our community."

"But some costs will fall directly upon the property-tax payers of Harris County," he said.

Charities will also continue to bear a heavy cost as they fill public-service gaps.

In Baton Rouge, La., which has taken in about 50,000 evacuees from nearby New Orleans, local aid groups such as Catholic Charities say they're getting double or even triple their typical volume of calls, as families plead for help with utility bills, prescription drugs and groceries. The free afternoon lunch at the St. Vincent de Paul Society has been packed; attendance is up nearly 25% over this time last year.

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