[StBernard] Updated Budget Estimates Show Road Home is Fully Funded

[Westley Annis]

Updated Budget Estimates Show Road Home is Fully Funded

$3 billion covers entire shortfall; no new funds needed from Congress for Road Home

BATON ROUGE, La. (December 7, 2007)-Today Governor Kathleen Babineaux Blanco joined members of the Louisiana Recovery Authority to announce that updated budget estimates for the Road Home show the program is fully funded. Based on these projections, the state will not have to seek new funds from Congress to ensure that every eligible homeowner receives their full grant award from the Road Home.

"At last, the moment we have all been hoping for," said Governor Blanco. "With the $1 billion I committed from the state, the $3 billion we just secured from Congress and the clarity provided through the December 1st appointments deadline, we can finally say with confidence that the Road Home is running in the black. After making nine trips to Capitol Hill over the last two years to fight for Louisiana's fair share, it's a tremendous relief to know we now have the funds we need to assist all eligible homeowners." 

As the largest single housing recovery program in U.S. history, the Road Home provides buyout or repair grants of up to $150,000 to homeowners with major or severe damage from hurricanes Katrina or Rita. 

"In 2005, Louisiana's share of rebuilding funds was unfairly capped at 54 percent despite our having suffered more than 70 percent of the damage from the hurricanes and the failure of our federal levee system," said Walter Leger, Chair of the LRA's Housing Task Force. 

"Because of Governor Blanco's unshakeable perseverance, the tenacity of Senator Landrieu and the bipartisan support of our entire Congressional delegation and that of the 110th Congress, we now have a fully-funded Road Home program. Today, I join thousands of Louisiana homeowners in saying thank you for making it happen."

In less than 17 months since Louisiana received enough federal funds to get the program off the ground, the Road Home has paid out $4.8 billion to more than 75,000 homeowners.

The recent appropriation of $3 billion, which was included in the defense funding bill passed by Congress and signed by the President in November, ensured that every remaining eligible homeowner will be served. 

Shortly thereafter, Governor Blanco and Governor-elect Bobby Jindal joined the Louisiana Recovery Authority in kicking off the Louisiana Gives Thanks campaign by traveling together to Capitol Hill to personally meet with leaders in Washington to express their gratitude for this and other historic investments they've made in Louisiana's recovery. 

"While we will certainly need ongoing support and resources from Congress to address long term recovery needs, it is great to know that we won't have to go back again for the Road Home," said LRA Executive Director Andy Kopplin. "Tens of thousands of families are counting on assistance from the Road Home so they can finish repairing their homes and get on with their lives. It gives us all tremendous assurance to know that the money is there." 

Earlier this year, the Office of Community Development's contractor, ICF International, released projections that showed the Road Home program was going to need to cover tens of thousands more homeowners with major or severe damage than the initial federal estimates of housing damages provided by the Federal Emergency Management Agency (FEMA) suggested. 

Because of these additional tens of thousands of eligible homeowners and other contributing factors such as higher levels of damage than FEMA estimated, lower than expected payouts from insurance companies and federal red tape that has restricted the state's ability to effectively utilize more than $1.17 billion in Hazard Mitigation Grant Program (HMGP) funds, the Road Home program faced a projected shortfall of $3- $4 billion. The last projection back in October, which assumed the program would serve about 164,000 homeowners at average grants of about $68,000, estimated the shortfall would be $3.3 billion. 

In an effort to resolve the budget uncertainty, state officials established a deadline of July 31 for homeowners to apply for Road Home assistance. This caused a large spike in applications with over 229,000 applications received by ICF and led to greater uncertainty in the budget. Eventually, more than 50,000 of these applications were found to be duplicate or invalid, while roughly 179,000 were recorded and determined to be eligible for an appointment. 

By August, a large number of the remaining eligible applicants still had not scheduled first appointments, so state officials subsequently announced the deadline for scheduling first appointments. By the December 1st deadline, only 168,868 of 179,035 total applicants had scheduled or completed a first appointment, making an estimated 10,000 applications invalid. 

Because of this, it is now estimated the program will serve between 151,000 and 159,000 homeowners, and state officials believe the recent appropriation of $3 billion will be sufficient to cover all remaining eligible applicants. 

The federal red tape associated with FEMA HMGP funds still remains an issue. However, FEMA has recently approved Louisiana's application to utilize a portion of HMGP funds for Road Home elevations, and it has also announced, at the urging of state officials and Louisiana's Congressional delegation, its intention to modify HMGP policies to serve more Road Home families than they currently allow. State officials believe that Congressional legislation is still necessary to further streamline program requirements and expedite payments of FEMA HMGP elevation grants to homeowners. 

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.