[StBernard] Legislature Approves Governor Blanco, LRA's Plans for Small Businesses, Fisheries and Reallocations

[Westley Annis]

Legislature Approves Governor Blanco, LRA's Plans for Small Businesses, Fisheries and Reallocations for the Road Home 


BATON ROUGE, La. (September 13, 2007) - The Louisiana Legislature today approved plans put forth by Governor Kathleen Babineaux Blanco and the Louisiana Recovery Authority to:

Expand the Business Recovery Grant and Loan Program by $68 Million

Through these plans $68 million in Community Development Block Grants (CDBG) funds will be provided to help small businesses trying to recover from hurricanes Katrina and Rita. More than 81,000 businesses were initially affected by the storms, while more than 18,000 are still out of business.

The proposal will increase available funding to the Business Recovery Grant and Loan Program from $143 million to $211 million to allow more businesses to access vital low-cost financing in the form of grants and zero-interest loans. The change will also expand the program to businesses initially excluded in the first round because of a lack of available dollars.

Provide $19 Million in Disaster Relief for Fisheries

Through these plans $19 million in CDBG funds will be used to create a new recovery program to improve and expand infrastructure critical to the fisheries industry including, but not limited to: docks, ice holds, boat launches, processing and shipping facilities, boats and other necessary infrastructure. The National Oceanic and Atmospheric Administration estimates Louisiana generated more than 76% of the annual catch landings in all the disaster declared parishes and counties in the Gulf Coast and suffered more than $2.1 billion of damage to its fisheries.

Reallocate $627.5 million to the Road Home program

Governor Blanco and the Louisiana Legislature approved legislation to use state funds to cover the cost of critical recovery projects, including $300 million in construction costs for the Medical Center of Louisiana at New Orleans and $187 million for the costs of repairs to state buildings, thereby freeing up funds that could be transferred to the Road Home program. 

Under this proposal, $627.5 million in CDBG funds will be transferred to the Road Home program and used to provide homeowner assistance grants to help resolve the projected shortfall in the program budget. This action plan amendment also proposes reducing a number of CDBG programs' uncommitted funds to reallocate an additional $50 million to the Road Home program.

Combined with $373.5 million in direct state appropriations, these proposed CDBG fund reallocations will increase available funding for the Road Home program by $1 billion consistent with congressional requests. 

In recent months, as the rate of closings increased, it became clear that the $7.5 billion originally allocated by the federal government for the program was insufficient. Three main factors contributed to the shortfall. Current projections indicate more homes were damaged and the amount of damage is more severe than FEMA estimates originally suggested, and the estimated percentage of losses covered by insurance are less than expected relative to the original estimates. 

"I want to thank the Legislature for its support of these initiatives and for stepping forward with a bold state commitment on the Road Home program," LRA Chairman C. Norman Francis said.

These plans now move to the US Department of Housing and Urban Development for final approval.

Hurricanes Katrina and Rita devastated South Louisiana, claiming 1,464 lives, destroying more than 200,000 homes and 18,000 businesses. The Louisiana Recovery Authority (LRA) is the planning and coordinating body that was created in the aftermath of these storms by Governor Kathleen Babineaux Blanco to lead one of the most extensive rebuilding efforts in the world. The LRA is a 33-member body which is coordinating across jurisdictions, supporting community recovery and resurgence, ensuring integrity and effectiveness, and planning for the recovery and rebuilding of Louisiana. 

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