Business owner: We’re prepared! Weather: You ain’t seen nothing yet. FEMA: (crickets)

Weather is getting fiercer by the year, causing more and more damage. How we deal with it is also changing drastically. After 40 years, FEMA, the Federal Emergency Management Agency, is sending clear signals that it is getting out of disaster-response business. What does that mean to you as a business owner? It means you better have a strong, vital weather strategy in place now. Because weather just became a bigger bottom-line drag.

FEMA Administrator Brock Long, the nation’s top emergency manager, wants everyone to hear three main messages:

  1. FEMA is broke.
  2. The system is broken.
  3. Americans can’t depend on a federal response to disasters. They will have to take care of themselves. “What I hope to do is inform Americans about how complex this mission is,” Long said. “I didn’t come up here to do status quo, I’m ready to change the face of emergency management.”

FEMA was founded in 1979, and came under the scope of the Department of Homeland Security in 2003. It declared 137 events disasters in 2017, down from a high of 242 in 2011. As of the end of March this year, seven disasters have been declared eligible for federal assistance. As of this date last year, that number was 25.

In addition to the decreasing role of the federal government to assist with recovery from severe weather damage, the new tax plan reduces the number of companies who will be able to deduct weather-related losses.

Under the new tax plan, businesses can only take deductions if losses were caused by a weather event officially declared a disaster by the president. This will wipe out businesses that aren’t wealthy enough to be well insured. If your office burns down, or your warehouse gets flooded, or hail demolishes your roof, the loss is yours to bear now, with no federal backup. Even a federal disaster declaration activates funding that generally covers only about 75% of the total cost.

Before, businesses suffering losses from any type of disaster – hail, fire, tornado, storm surge, flood – could deduct losses that exceeded 10 percent of adjustable gross income and were not covered by insurance or other reimbursements.

So you’re going to want to do two things as soon as possible: 1) develop and implement a robust weather strategy and 2) lay in some supplies, because FEMA’s not coming to save the day.

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