Restoring the Gulf Coast Through Local Control
For many on the Gulf Coast, the Deepwater Horizon oil spill seems like it was yesterday. Many might be surprised that almost five years have gone by since that tragic accident, which released millions of barrels of oil into the Gulf of Mexico.
The spill caused billions of dollars in economic harm and immense damage to the Gulf Coast environment. While some of the environmental impact is apparent, many of the longer-term implications remain unknown.
What we do know is that Congress afforded Gulf Coast states a unique opportunity to remedy the damage. In 2012, Congress enacted the RESTORE Act ("Resources and Ecosystem Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States"). The law essentially redirects federal fines and penalties to three different pools of money, in an effort to give local and regional officials more control over restoration projects related to the spill.
The structure of Congress's response may prove to be an interesting model for future government spending. Too frequently, agency heads in Washington are tasked with doling out federal resources on any number of federal priorities. That often means well-intentioned bureaucrats in a D.C. office building, rather than the officials and citizens closest to the problem, make critical operational decisions.
The RESTORE Act changes those dynamics significantly. While federal officials are responsible for allocating some of the funds, the Gulf Coast Ecosystem Restoration Council, which is made up of state governors and federal agency officials, has discretion over a second pool of money, and the five Gulf states have authority over a third.
While the law may enable recovery dollars to be spent more efficiently, it poses a number of challenges. First, it requires thorough coordination to avoid funding overlapping projects. Each administrative body spending RESTORE Act funds must operate in constant communication with the others. That likely means officials should establish federal and regional project priorities before states commit their resources.
Devolving spending authority for such a significant pot of money requires substantial transparency and accountability. The BP penalties, which represent the lion's share of the RESTORE Act funds, have yet to be finalized. But both the regional council and the individual state councils must ensure that their project-selection criteria are clear, that project expectations and deliverable metrics are publicly available, and that the responsible council works in concert with the treasury inspector general's office to track dispersal of funds and completion of projects.
For the RESTORE Act to be most effective, states must demonstrate an ability to responsibly balance the twin priorities of economic and environmental restoration. Rather than simply using the RESTORE Act funds to offset tight state budgets, each state must look for priorities that bolster their economy and environmental well-being.
The RESTORE Act is a tremendous opportunity for the Gulf Coast to rebuild after the spill, but it may also be a chance for America to find better ways to care for taxpayer resources, rather than another centralized plan coming out of our nation's capital.
Cameron Smith is the southern region director of the R Street Institute, a free-market think tank based in Washington, D.C.