Day Late And Dollar $hort
According to some, Governor Kathleen Blanco's Road Home Program is going broke.
If the Road Home keeps paying out homeowner grants at the current rate -- and all the remaining applicants qualify for compensation -- the state aid program could be more than $3 billion short, state officials said.
"There's no question we're going to run out of money," said Sam Jones, Gov. Kathleen Blanco's liaison for the federally financed Road Home.
The problem is twofold:
-- For the first 10,000 grants, the program paid out nearly $750 million. That left about 120,000 applicants in the pipeline as of last week. If Road Home grants continue to average $75,000 per closing, the state is on track to spend $9.75 billion. Based on awards calculated for 68,000 applicants so far, the total payout could be even higher, more than $10 billion. The state received $10.4 billion in block grants from Congress, but the Louisiana Recovery Authority budgeted only $7.5 billion of that for the homeowner program.
-- The $7.5 billion the state budgeted is really only $6.3 billion because, at least for now, $1.14 billion the state was counting on getting from the Federal Emergency Management Agency's hazard mitigation grants is not yet released. FEMA has cited legal issues as the holdup on releasing the money, and Louisiana officials have complained about the delay for months.
A shortfall could be easy to understand because it is difficult to accurately forecast the award amounts and the exact number of applicants. What makes this most distressing is the unexpected way in which it came to light, mainly due to Governor Blanco's own statements.
Blanco responded to a letter from Jindal late Tuesday by accusing him of not supporting all of her efforts to increase federal money to Louisiana and for not acknowledging that the state got short shrift from last year's Republican Congress when compared with Republican-run Mississippi.
But Louisiana did get an additional $4.2 billion in block grants from Congress last July when state officials argued Louisiana's initial share of $6.2 billion was not enough. When the money came through, Blanco said at a news conference, "We have all the funding we need to run our full program."
Can you say, "Hey buddy, can you spare a dime."
2 comments:
The second annual Rising Tide conference will be held August 24-26, 2007, at the New Orleans Yacht Club. This is a NOLA blogger-organized and supported conference featuring speakers, panels, breakout sessions, and other dialogs on the future of the city of New Orleans.
This year's emphasis is on ground-level, grass-roots efforts. It has become clear to those of us in south Louisiana that we will have to watch the watchmen, as well as take the upper hand in setting the city back on track. To that end, there will be presentations on local politics and how to influence them, making civics sexy, sustainability, levee engineering, and media outreach.
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On Friday, August 24, there will be a party at Buffa's Lounge featuring the work of New Orleans videographers, and Sunday is reserved for a hands-on service project in aid of the NOLA school system. At the Buffa's party, we are serving cocktail party-type food, but there will be a cash bar.
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Actually, the reason the Road Home program is having shortfalls is that Louisiana chose to spend money they didn't have. When the initial 16 billion of federal grant money was distributed across the Gulf Coast, Louisiana designed the Road Home Program to use that money. But they designed it in a way that it spent more money than Congress gave them. They were too lenient about giving it away, gave away too much, etc. (I don't pretend to know the exact mistakes they made, but one was overly generous home inspections).
When it became apparent that LA Road Home had screwed up and was going to run out of money, the Republican Congress (that you say short shrifted them the first time around) faced a dilemma - let the program collapse, or bail them out for screwing up? The additional $4.2 billion you cite is the result of Congress deciding that helping the state recover is more important than penalizing Blanco's incompetence.
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