Lawmakers hope to create fund for businesses with leftover COVID-19 federal relief dollars

By David Jacobs | The Center Square

Louisiana officials don’t know how much federal pandemic aid local governments will be able to spend, though lawmakers don’t think the locals will need the full $811 million that’s available.

Some legislators and business advocates are hoping to use part of what’s left over to create a $200 million fund to boost local businesses that shut down or limited operations as part of the effort to reduce the spread of COVID-19.

Sen. Heather Cloud, a Turkey Creek Republican, said her proposal would help business owners who did what they were asked to do by the government to protect public health. By helping those businesses stay open, lawmakers could boost the local tax base for years to come, she said.

“My plan doesn’t take away from the locals,” she said. “It indirectly gives money to the locals.”

The federal CARES Act dedicates $1.8 billion to Louisiana. State government can share up to 45 percent of the money with local governments.

Commissioner of Administration Jay Dardenne, who represents Gov. John Bel Edwards, says Cloud is correct that a business fund is an eligible expense. Mississippi is launching a similar fund with their federal money.

Dardenne said he will have a better idea of the local governments’ needs on June 15, the deadline to apply for the first round of funding. He said he doesn’t think their direct COVID-19 expenses will be nearly enough to hit the 45 percent cap but he wants to ensure they are made whole. State costs, on the other hand, could exceed 55 percent, he said.

Both CARES Act and disaster aid through FEMA are available to governments, and there is significant overlap of what types of spending are eligible. As has been the case with other disasters, the FEMA money is paid in the form of reimbursement for eligible expenses. Dardenne is encouraging local governments to maximize their requests to FEMA, noting that the CARES money can be used to pay their local match.

“We would be the second resort,” Dardenne said.

The Joint Legislative Committee on the Budget on Tuesday approved $250 million in spending authority for the Governor’s Office of Homeland Security and Preparedness to use federal money to cover purchase orders related to the pandemic response. GOHSEP initially had asked for $500 million in spending authority, but officials don’t expect to need that much, and they would have the ability to ask for additional authority later.

Also on Tuesday, the joint budget committee approved a four-year contract worth $285,000 annually for Cade Brumley, the Jefferson Parish Schools leader who the Board of Elementary and Secondary education has selected to be the next state superintendent. He would be eligible for a 3 percent annual pay bump based on the board’s evaluations of his job performance.

John White, the last state superintendent, made $275,000 a year.

The state Senate still must confirm Brumley’s appointment.