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State faces criticism on its spending plan for $300M in flood aid

After catastrophic flooding in eastern Kentucky, many are still left picking up the pieces of the aftermath.
Justin Hicks
After catastrophic flooding in eastern Kentucky in 2022, many are still hoping aid packages can help recovery efforts.

Eastern Kentucky leaders say it appears the state’s seven high ground sites would use most of the money set aside for flood relief, leaving little behind for other hard-hit areas.

The Kentucky Department for Local Government (DLG) is fielding criticisms and comments on its plan to spend $300 million in federal flood relief from the U.S. Department of Housing and Urban Development (HUD).

The award was announced in March, after which DLG asked community members to voice their unmet needs. Now, its made public the first draft of their resulting plan.

In a written statement, a DLG spokesperson said the Beshear administration is committed to using a variety of funding sources, including the Team Eastern Kentucky Relief Fund and a previous $123 million award from HUD for 2021 disasters, to rebuild “every home and life impacted” by flooding. The public meetings are to gain input, and the agency will listen to feedback from local leaders before it sends the plan to the federal level for review.

“Keep in mind, when you’re looking at this action plan, this is a 30,000-foot view of how this plan is to be carried out in multifaceted efforts in relation to the disaster,” Travis Weber with the Department for Local Government said in a public presentation.

The proposal broadly focuses on creating safe housing options by incentivizing new construction or repairs on existing homes outside of a flood plain.

Local leaders say the first draft appears to prioritize the state-led high ground communities over counties.

County officials worry that Pike County’s share would dilute the impact of funding to harder hit counties. Residents say the aid isn’t tailored to help some middle-class families impacted by the disaster.

Will most of the money go to state-sponsored “high ground” sites?

The largest spending buckets in the plan are aimed at building new single-family homes and infrastructure like roads and bridges. But the plan also says the majority of that money will go towards “high ground” sites and, if funding is left over, it would open applications to access it.

In public hearings last week, local leaders expressed indignation that the “high ground” sites prioritized in the plan are vaguely defined, but seem to allude to the state’s seven pre-planned communities.

Community members from Breathitt County, which flooded in both 2021 and 2022, are especially disgruntled. It does not have a state-led high ground site planned.

“If they say the majority of the money will be spent on high ground sites, then we’re just totally left out and that’s totally unfair,” Laura Thomas, Mayor of Jackson, said. “I want everyone to get help, but the federal dollars — they’re not going to be enough for all the unmet needs in our communities.”

Environmental review documents show that the state is preliminarily budgeting for up to $117 million in HUD money for three of the seven sites so far. (The state is also requesting to draw from another HUD award previously granted to address disasters in 2021.)

Will allowing Pike County access to the money dilute its impact?

In the proposal, the state exercised an option to make Pike County eligible for funding. However, just a single zip code was identified as a “most impacted and distressed” area by HUD. The highly impacted areas are required to receive at least 80% of the funds.

Local leaders are concerned that, with its much larger population, less-impacted residents in Pike County could dilute money their hard-hit counties could use.

“I understand they were impacted and we don’t want to pit one county against another, but this is a huge increase in the eligible applicant pool. It’s a 71% increase in the number of people who can access this money,” Scott McReynolds of the Housing Development Alliance said.

McReynolds cited research showing Pike County had far less damage than other counties singled out to receive significant funding.

Will people with moderate income and renters slip through the cracks?

The state is required by HUD to spend at least 70% of the award on activities that benefit low to moderate income households. For example, a four-person household would qualify if they make at or less than $51,350 a year.

Several local residents said the aid cutoff is too low and “punishes” them for working and having a moderate income.

“It creates a benefit cliff so that if somebody makes an extra buck an hour…they go from getting significant help to none,” McReynolds said, suggesting a sliding-scale need determination be used instead.

The state’s plan also has incentives for owners to build and repair rental housing. But residents were quick to point out that, like many other federal aid programs offered so far, it does nothing for the tenants themselves.

“I’ve cried a thousand tears, but I’ve had so many doors shut in my face to tell me no because we’re renters,” a woman named Rhonda who identified herself as being from Perry County told DLG officials. “We don’t qualify for anything, and even to get a home. We make too much income, because I’ve worked since I was 13 years old.”

The state is currently accepting any public comments until December 13 at 4:30 p.m. People can fill out an electronic form, call, or mail their suggestions.

This story has been updated.

Justin is LPM's Data Reporter. Email Justin at jhicks@lpm.org.