Dollars-and-cents security

Times Staff Writer

California leaders went on their own version of an Orange Alert last week when the Department of Homeland Security announced that it was raising the state's overall anti-terrorism grant but lowering the amount of money it would provide to Los Angeles and Sacramento.

Gov. Arnold Schwarzenegger promised to pressure the department into changing its mind. Democratic Sen. Dianne Feinstein also objected, saying: "Los Angeles is the largest city in the most populous state in the nation, and Sacramento is the capital city. Both face significant risk and deserve more funding, not less."

But do they really?

Homeland Security Secretary Michael Chertoff has been doing a creditable job of reforming the department's habit of allocating terror funds in a haphazard manner, and the reduction of about $8 million in L.A.'s annual grant, while it may disturb local officials, is one of the first fruits of the more logical process. Chertoff's reforms -- in particular the Urban Area Security Initiative, a grant targeting the "most at-risk cities" -- are good news for other cities in California, such as San Francisco, that have seen their funding increase.

First, the department is using more and improved data in its assessments and has refined its criteria and deciding which cities are eligible for funding. Second, it is using its "targeted capability list," which ranks risks and prioritizes responses accordingly. These changes aim to ensure not only that L.A. has enough trained first responders but that small cities -- like Colchester, Vt., (population: 18,000), which spent $58,0000 in homeland security funds on rescue vehicles capable of boring through concrete -- stop wasting public money. In addition to these reforms, each eligible city must defend its funding request by submitting an investment justification. Cities that are unwilling or unable to present a cost-effective plan for how they would spend the federal money could see that money seriously reduced.

The relative simplicity and transparency of the system has two main benefits. First, the department can allocate money based on risk rather than politics. Second, because the department is following an established process, it is finally in a position to defend its funding decisions, like its decision to decrease funding to Los Angeles and Sacramento but increase funding to San Diego, Orange County and the Bay Area.

Los Angeles is one of 45 places eligible for the department's largest grant program -- $746.9-million in urban area security grants. It gave 55% of the money to the top six high-risk areas: New York/northern New Jersey; greater Washington, D.C.; L.A./Long Beach; Houston; Chicago, and the San Francisco Bay Area. Even though the 55% number is rather arbitrary, the focus given to high-risk cities is a significant improvement over last year's allocation and shows that the department properly considers Los Angeles/Long Beach an area requiring top-tier protection.

Still, there could be legitimate reasons why L.A. received less money this year. Congress cut the overall homeland security grant program (which is made up of five separate grants) by 29% in 2006 and by 3% this year.

And the competition for this money is intense. While there is no indication that Los Angeles didn't do a good job on its grant application, one of the reasons the department gave for its 50% increase in Houston's funding was the city's well-written proposals for the size and use of federal anti-terrorist grants.

Most important, the reduced funding could be a sign that Los Angeles' security spending needs have decreased. L.A. has received more than $227 million in grant money between 2003 and 2006. The state of California will supplement L.A.'s $72.6-million allocation with a significant share of the additional $100 million it received from other homeland security grants this year. That's not small change, even for California.

To keep things in perspective, remember that L.A.'s allocation remains the second-highest in the country, behind New York City. The city itself will receive $11 million more than the Washington, D.C., area, the next highest, and 50% more than northern Jersey.

As Chertoff explained last week, homeland security grants aren't "annuities or entitlements like Social Security," designed to pay in perpetuity. They are supposed to help states and local jurisdictions build their response capacities and prepare for the possibility of a catastrophic event. In a well-run system focused on protecting people from such threats, the flow of federal dollars should logically stop. At some point, every city -- even New York and Los Angeles -- should stop receiving federal security grants because the cities should have addressed the most catastrophic threats. By now, states and local communities should be in charge of most of their preparedness efforts.

The ending of such grants, however, may terrify city officials for another reason. Their citizens might begin to ask what those cities have done with all that money. Unfortunately for politicians, there's no grant that can protect them from this catastrophic threat.

Veronique de Rugy is a senior fellow at the Mercatus Center at George Mason University.

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