More Local Taxes Only Go So Far in Funding Climate Resilience.
Local officials use the same lever again and again, but it’s not enough - or sustainable.
In the small coastal town of Mandeville, Louisiana, just across Lake Pontchartrain from New Orleans, rising waters and increasingly frequent tropical storms have battered the community’s roads, homes, and drainage systems. But instead of waiting for federal dollars that may or may not arrive, Mandeville residents took matters into their own hands. In April 2023, voters approved a $15 million bond referendum to fund drainage improvements, raised entirely through local taxes. The effort passed with over 60% approval, despite broader concerns about inflation and affordability. "We can't afford to wait anymore," said Mayor Clay Madden. "This is about protecting our homes and our families."
General Obligation Bonds >> Investopedia
GO’s such as Climate Bonds are backed by the full faith and credit of the issuer, meaning the local government has the power to levy taxes to pay off the bonds. GOs are typically secured by tax revenue, such as property taxes or income taxes, depending on the level of government.
Across the United States, local communities are increasingly being asked by local officials to step up to finance climate resilience projects themselves. Faced with bureaucratic delays, inadequate federal aid, and the slow trickle of state-level adaptation funding, towns and cities have begun turning to the very people most at risk—residents and small businesses—to bankroll stormwater infrastructure, seawalls, fire prevention measures, and other adaptive systems. While such efforts help initiate projects, secure matching funds, and build community trust, they are rarely sufficient to cover entire local climate resilience project budgets. They also represent new, higher local taxes to cover the cost of this new unanticipated expense.
This trend is not driven by ideology or political allegiance so much as geographic urgency. In Miami Beach, Florida, where high-tide flooding—"sunny day flooding"—is now a regular feature of city life, local officials launched a $650 million stormwater management plan in 2021, financed in part by a stormwater utility fee that residents and local businesses began paying on a monthly basis. The fee, which varies based on the impervious surface area of a property, is expected to generate over $25 million annually. Though controversial at its inception, the city council reported in 2024 that the funding had enabled the elevation of 19 streets and the installation of 44 new pump stations. "The fee structure gave us financial certainty," said Public Works Director Roy Coley. "And it gave the community skin in the game." But the total cost of infrastructure repair and climate resilience in Florida are too far beyond even this local effort.
In 2020, Miami was named the most at-risk location for storm surge with an estimated cost of over $157 billion in renovations and repairs. In 2022, Miami had the highest structural damage costs due to flood risk, exceeding $1 billion, according to Statista. Additionally, Miami-Dade County faced an estimated $200 million in additional annual storm damages due to projected increases in hurricane windspeeds by 2035, according to Resources for the Future
Local financing models are multiplying in form and structure. In Boulder, Colorado, where wildfires have grown in frequency and severity, voters in November 2021 approved an extension and increase of the city's Climate Action Plan (CAP) tax. Originally enacted in 2006, the CAP tax is levied on electricity usage and collected from residents, commercial property owners, and industrial users. The renewed tax, expected to generate $3.9 million annually, will fund wildfire mitigation, electrification, and community resilience centers. In Boulder’s case, local climate taxation has not only endured but expanded over time—an indication that public support for resilience financing can deepen with experience.
Meanwhile, in the more conservative reaches of inland California, a surprising form of financial innovation emerged in Paradise, a town nearly leveled by the Camp Fire in 2018. In 2022, the Paradise Irrigation District partnered with local banks and credit unions to create a Resilience Loan Fund, offering low-interest loans to rebuild fire-resistant homes and upgrade water infrastructure. Nearly $11 million has been disbursed to date, largely supported by community banks and philanthropic contributions, but also repaid with resident co-investment. While modest in size, the fund has proven catalytic—helping the town secure additional recovery grants by demonstrating local commitment.
The logic of these initiatives is clear: when the federal government lags and climate impacts mount, local finance can serve as both a bridge and a bet—a bridge to more comprehensive funding, and a bet that shared sacrifice will result in greater resilience. But local finance is not a panacea. As climate threats grow more intense and unevenly distributed, wealthier municipalities may have more ability to act, deepening climate inequality. In affluent Marin County, California, for example, the city of Mill Valley passed a special property tax in 2022 to fund sea level rise adaptation along Richardson Bay. The tax, which costs the average homeowner over $250 annually, is expected to raise $3.2 million per year. In less affluent flood-prone areas, such as parts of eastern Kentucky or the Mississippi Delta, such models may be politically or economically untenable.
Still, the expanding landscape of grassroots resilience finance suggests a maturing understanding of climate risk: adaptation is not just an engineering or scientific problem, but a financial one—and one that requires distributed participation. Local business associations, school boards, and religious institutions have begun playing a role. In Hoboken, New Jersey, the Hoboken Business Alliance in 2023 helped raise $1.1 million in private contributions toward a $16 million green infrastructure initiative, supplementing state and federal grants. “We knew it was in our interest to avoid another Superstorm Sandy,” said the Alliance’s director.
Superstorm Sandy caused approximately $29.4 billion in damage to New Jersey. This figure includes damage to property, businesses, transportation, utilities, and infrastructure, as well as federal aid the state received. The storm also resulted in 38 fatalities, damaged or destroyed 346,000 homes, and knocked out power for about 2.7 million residents.
