Illinois Families’ Flood Buyouts on Hold Due to Budget Mess

After the Mississippi River flooded four years ago, more than 100 Illinois families agreed – some reluctantly – to sell their homes to the government for demolition so they could move to higher ground.

With the paperwork finally coming together last spring on a partial state match for the buyouts of 111 properties, many owners signed contracts on new homes and started packing boxes.

Then Illinois lawmakers hit an impasse on a state budget, which may not get solved until next year, leaving the transactions in limbo.

“We want to move on and get out of this mess, and we can’t do anything,” said Vella Friedman, 68, of Olive Branch, a tiny community that was among the hardest hit.

Friedman said the decision to sell their land and the home her husband built 23 years ago wasn’t easy. But they ultimately determined they’d never be able to sell the property for a decent price otherwise. They found a new home across the river in Missouri, where Vella Friedman’s kids live.

The program is just one of many caught up in the fight between Republican Gov. Bruce Rauner and the Democrats who run the General Assembly over the budget and the new governor’s pro-business agenda. While the standoff continues, state agencies do not have full authority to spend money.

The Federal Emergency Management Agency already has provided roughly $9 million and state legislators approved up to $5 million for the project, which was implemented to ensure the costs of protecting people and property would be lower if such flooding occurs again.

FEMA agreed to buy 137 properties, said Alexander County Highway Engineer Jeff Denny, who’s overseeing the program for the county. State officials say Illinois has agreed to provide a 25 percent match for 111 of those properties, which the state would take over to ensure nobody could build on them again.

While FEMA provided the grant money to the county up front, the state’s match only happens after the closing has occurred and all structures on the land have been demolished.

Meanwhile, residents are stuck continuing to pay property taxes, insurance and utilities _ some on houses that are no longer habitable. Others have contracts on new homes because the program requires properties be vacant on closing day. Making matters worse, Friedman said the taxes on their home almost doubled on the bill she received in recent weeks.

“I don’t think (lawmakers) really understand what’s going on down here,” she said.

The record flooding along the Mississippi and Ohio rivers in the spring of 2011 required the resources of the National Guard, along with workers from the state natural resources and transportation departments and others. In Alexander County alone people filled almost 1 million sandbags.

Earlier this year closings were held on about 35 properties, with FEMA paying its part and the county fronting the money for the state. But before Denny could get approval for demolition contracts so the county could be reimbursed, he received a letter from the Illinois Department of Natural Resources stating that the program was suspended – even though the federal money already had been allocated.

The June 29 letter noted that lawmakers hadn’t agreed on a budget, so there was no appropriation authority to release the roughly $2.5 million in funds the cash-strapped county already has paid out. That also means the process is halted for another approximately 100 landowners.

Rauner spokeswoman Catherine Kelly pinned blame on Democrats, saying the state can’t make the payments because the majority party failed to pass a balanced budget.”

Rauner has said he won’t approve a tax increase to close a multibillion-dollar budget hole until Democrats agree to some of his priorities, such as weakening labor unions. Democrats have opposed his agenda, which they say will hurt working people and the state’s most vulnerable.

Denny said he’s been told that under the agreement with the state and FEMA, the funds can’t be used for other purposes once a budget deal is reached. But he fears what could happen if the stalemate stretches on too long.

At this rate, if there’s flooding again next spring, the state will be in the same situation it was in back in 2011, he said.

“The problem with the whole thing is this money’s just sitting in a (state) bank account.” Denny said. “There’s pretty much frustration across the board.”