Galveston Officials Paint Bleak Picture to Lawmakers After Ike

Galveston officials paint bleak picture to lawmakers after Ike

12:20 AM CST on Thursday, January 8, 2009

Associated Press

GALVESTON, Texas -- Galveston officials pleaded with state lawmakers on Wednesday to help them rescue their island city from the dire financial straits it finds itself in nearly four months after Hurricane Ike caused devastating damage.


Galveston officials paint bleak picture after Ike
January 7, 2009 View larger E-mail Clip More Video Mayor Lyda Ann Thomas and City Manager Steve LeBlanc painted a bleak economic picture of their city for members of a legislative committee meeting on the island.

They told lawmakers that despite a hiring freeze and a 3 percent pay cut for all employees, layoffs are imminent and that property tax revenues will be down by up to 40 percent.

About 75 percent of the homes in Galveston, about 50 miles southeast of Houston, sustained some damage from Ike’s 110-mph winds, rain and 12-foot storm surge when the storm came ashore near the city on Sept. 13.

“We’re getting to the point of being desperate for help,” LeBlanc said. “If there is no help from the state, we might have to cut back on city services severely.”

Galveston, which has an annual budget of about $80 million, also needs help to pay for the $178 million in damage Ike caused to buildings, roads and other infrastructure, LeBlanc said.

Thomas and LeBlanc asked lawmakers for financial help, including letting the city temporarily keep most or all of the sales tax revenue it usually gives to the state and apply for long-term, low cost emergency loans.

“By rebating the sales tax for a set time for areas devastated by Ike you would be enabling us in the Gulf Coast to rebuild our homes and mitigate against future disasters,” Thomas told members of the House Select Committee on Hurricane Ike. Audience members applauded.

LeBlanc said the city applied for help from the Disaster Contingency Fund, created by the Legislature in 2007 to provide money and other help for local governments after a natural disaster.

But the city was turned down because lawmakers never appropriated money for the fund.

LeBlanc also implored the committee to help the University of Texas Medical Branch at Galveston—the area’s largest employer and a major provider of indigent care in Southeast Texas—recover from the damage it suffered during Ike.

UTMB officials originally estimated the state’s oldest medical school sustained about $710 million in damages from Ike.

On Wednesday, UTMB leaders told lawmakers damages are now estimated to be more than $1 billion. Only about $100 million of that was covered by insurance.

The massive damage at UTMB prompted the UT System Board of Regents to lay off 3,000 employees and reduce the number of beds at the medical facility’s public hospital from 550 to 200.

The downsizing has prompted some, including Thomas, to question whether UTMB and the UT regents are committed to restoring the facility.

Both UTMB President Dr. David Callender and UT System Regents Chairman H. Scott Caven Jr. told the committee they remain focused on restoring the facility.

“We want to bring UTMB back to the level of excellence it had before Ike,” Callender said.

Callender said UTMB plans to ask the Legislature during its session this year for an emergency appropriation of about $335 million to help pay for business losses as well as damaged equipment and buildings.

Callender said UTMB could eventually be a 500-bed facility but not all of these beds might be located on the island’s hospital.

Wednesday’s hearing was the final one for the committee, which plans later this month to submit its report about how local governments as well as the state responded to Ike.