Accounting for Risk

Last year, Wyoming bought a robot to handle bombs and hazardous materials. The state paid for Miss Daisy, as the robot was named, with $150,000 in federal funds for homeland security.

Miss Daisy proved her mettle a few months later in a highway pipe-bomb incident, according to the Associated Press. But news of this and other expenditures has angered citizens who feel the money would be better spent elsewhere, for example, in New York City, which steadily has lost thousands of police officers since 1999.

Instead of addressing key vulnerabilities, homeland security grants often subsidize local police and fire departments, otherwise funded through local taxes. And without stringent oversight, not all the money is being used for terrorism prevention. In 2003, The Washington Post reported that the District of Columbia's homeland security funds had helped pay for a summer jobs program and an environmental assessment of a site the District wanted to develop. Rep. Carolyn Maloney, D-N.Y., has called it a "pork-barrel system." Retired Sen. Don Nickles, R-Okla., who was chairman of the Budget Committee, said some cities and states were using the grants as "revenue sharing."

The Homeland Security Department's Office of State and Local Government Coordination and Preparedness oversees anti-terrorism grants. The six types of grants awarded noncompetitively to states and localities will provide $2.5 billion in fiscal 2005. Other funds given through the 2001 Fire Act and state and local training, exercise and technical assistance grants, as well as programs covering port, rail, inner-city bus and highway security, bring the total to about $4 billion.

Statutory requirements determine a portion of the funding formula. For four of the anti-terrorism grants, the USA Patriot Act requires the department to give each state a minimum of 0.75 percent of the total. The rest is divvied up by population size. The state minimum has created variations in per capita spending, with sparsely populated areas typically receiving more per person. The disparities have increased pressure to make risk more of a factor in grant allocation.

In his budget proposal for 2006, President Bush recommended allocating funds to states and localities based on threats, not population. Congress has been working to overhaul the formula for state and local grants, but without much success. When debates over state minimums proved insurmountable last year, lawmakers removed language from the 2004 Intelligence Reform and Terrorism Prevention Act that would have revamped grants allocation. Now, pending congressional approval, the 2006 budget would lower the state minimum to 0.25 and have the remainder distributed based on threat assessments and state strategies.

But it's not clear how the department will prioritize threats. Homeland Security's Directorate of Information Analysis and Infrastructure Protection has yet to publish a National Vulnerabilities Index. And the State and Local Government Coordination and Preparedness Office is working out the basic anti-terror capability each state should have.