How to spend oil spill fines wisely
A federal judge in New Orleans will soon decide how much oil company BP has to pay in Clean Water Act fines for its role in the 2010 Deepwater Horizon spill. His decision will have ramifications for Florida’s Gulf Coast for decades to come, as will choices made in Tallahassee and in county seats across the state.
This is because under the RESTORE Act, which Congress passed in 2012 with strong bipartisan support, these Clean Water Act fines won’t primarily go to Washington. Instead, Congress decided to allocate 80 percent of the funds for states and local governments across the Gulf Coast to invest in their economies and environments.
The RESTORE Act is a potent tool for Florida. But for its promise to come to fruition, funds have to be spent wisely and in a way that benefits the state’s economy and environment.
There’s no doubt that Florida’s economy and environment are intimately connected. Tourism is a major driver of the Florida economy, providing more than 280,000 jobs. Wildlife tourism is a $20 billion industry that draws more than 7.6 million tourists to the state annually. And a study by researchers at Georgetown University suggests that hospitality and tourism will be the second-largest growth industry in the state through 2018.
Add to that the $5 billion in annual sales and more than 100,000 jobs from commercial fishing, and there’s no doubt that Florida’s economy depends on a healthy and vibrant coastal environment.
In order to spend the RESTORE Act funds effectively, the state and the counties need to ensure that money is spent on the right things, which in turn means there must be efficient processes in place to decide how to spend it.
The intent of the RESTORE Act is clear: to invest in projects that have both environmental as well as economic benefits for the Gulf Coast, particularly in communities that suffered damage as a result of the oil spill. It is not intended to provide specific aid to homeowners and businesses that suffered as a result of the spill; that is the purview of other settlements and programs.
Rather, funds from the RESTORE Act should be spent on public goods: products and services like flood protection infrastructure, barrier island and wetlands restoration, and seafood habitat preservation. These are the types of projects that help protect the natural environment and can have widespread and significant positive effects on Florida’s economy, not just for existing firms and industries but for new businesses and entrepreneurs as well.
Many of these projects are also likely to reduce the cost of future natural disasters like floods, which is good news for policyholders who have seen their premiums increase recently. It’s also good for Florida’s taxpayers, who are ultimately on the hook for much of the $330 billion worth of risk backed by the state-run Citizens Property Insurance Corp.
Of course, it’s not enough to have good intentions in mind. It’s also critical for the public and the media to oversee spending decisions throughout the process — and before money goes out the door.
That means that both the state government as well as the counties need to make the allocation and spending processes radically transparent.
In practice, this means that all potential projects receiving RESTORE Act funding should have their details, including benefit-cost analyses, posted online in a searchable format before funding decisions are made. This is always important for good government, but it’s made all the more imperative by the fact that this is a one-time windfall that Florida is unlikely to see again. Decisions made now will have impacts for generations to come.
And every governmental agency that allocates or spends RESTORE Act money should hold all of its meetings in public, with no closed-door sessions and no off-the-record votes.
Ultimately, Florida should consider following Louisiana’s lead and establish a long-term coastal plan that ties together economic considerations with environmental needs and flood protection. Such a plan can help guide spending decisions not just with RESTORE Act funds but in the future as well.
The RESTORE Act gives Florida a once-in-a-lifetime opportunity to invest in its Gulf Coast in a way that can meaningfully improve the environment and the state’s economy. But only by focusing on providing meaningful public goods and spending in a completely transparent way will the promise be fulfilled.
