Restoring the Tax Base as a Planning Anchor: The Foundation for Resilient Recovery

by ISD Fellow Stephen Cauffman

In the aftermath of a disaster, communities often focus on rebuilding what was lost. But true resilience — defined as the ability to prepare for, withstand, and recover from disruptions and adapt to changing conditions — requires more than reconstruction. It demands a deliberate strategy that anticipates disruptive events and their potential impacts and taking actions to reduce risk and, following disaster, restores not just physical structures, but the economic and social systems that sustain daily life, while building resilience to future events. At the heart of this effort is one essential goal: restoring the local tax base.

The tax base is the lifeblood of a community. It funds public safety, utilities, infrastructure, schools, health services, and other critical functions. After a disaster, this financial foundation is at risk. Property damage, business closures, and population displacement can dramatically shrink tax revenues, threatening the very services needed to support recovery.

In most communities, the greatest contributor to tax base is property taxes. That is why keeping people in place to support recovery must be a top priority. Displacement fractures communities, delays recovery, and can lead to recovery that does not comport with local goals. Ensuring residents can remain in their homes, return to their jobs, and access essential services is critical to restoring economic activity — and by extension, the tax base.

But people can only stay if the core elements of everyday life are quickly restored. That means:

• Safe, habitable housing to stabilize families and neighborhoods

• Reopening businesses to provide jobs, income, and essential goods

• Functioning schools and daycares to support working families

• Access to food, healthcare, pharmacies, and service providers to meet basic needs

These functions are interdependent. Businesses need customers and employees. Families need income to afford expenses and schools and child care so that parents can return to work. Schools need students and staff. Government services are required to provide public safety, health services, some utility services, and public works.. And all depend on infrastructure — power, water, roads, broadband — to operate.

This interconnectedness calls for a logical, coordinated approach to resilience planning, one that focuses on restoring critical functions and services, not just structures. Buildings and infrastructure are enablers, not ends in themselves. The goal is not simply to rebuild what was there before, but to ensure continuity of function that supports community well-being.

Business plays a central role in this strategy. Local businesses are not only economic engines — they are also hubs of essential services, social connection, and cultural identity. Yet, 40–60% of small businesses never reopen after a major disaster. Of those that do, 25% fail within a year. Supporting business continuity — through capital access, fast permitting, and insurance — can make the difference between economic collapse and a thriving recovery.

Crucially, resilient outcomes don’t happen by accident. They are the product of intentional, pre-disaster planning. Without a clear, community-driven vision for recovery, the process becomes fragmented, inequitable, and market-driven. By contrast, communities that plan ahead — setting priorities, identifying vulnerabilities, and engaging local stakeholders recover faster and more fairly.

But there is a tension in many communities. Homes and businesses may now face threats that they did not in the past. When properties are bought out or rendered uninhabitable following a hazard event, they no longer contribute to the tax base, placing fiscal strain on the local government. So, communities need to plan the actions to reduce risk carefully to make sure that they are balanced with the needs of the community and its residents.

A resilient recovery is one in which no adverse effects remain in the community—where life returns not only to normal, but to something stronger and more sustainable. By centering the restoration of the tax base, communities can align their recovery investments around the functions that matter most, keeping people in place and reinforcing the systems that support long-term resilience.