Sunday, July 14, 2024

Edwards wary of setting aside $200 million in pandemic aid for business fund

by BIZ Magazine

By David Jacobs | The Center Square

Using federal pandemic relief money to set up a $200 million fund to help small businesses might be a good idea, but now is not the time to consider it, Gov. John Bel Edwards said Wednesday.

Louisiana state government received $1.8 billion through the federal CARES Act and plans to share up to 45 percent of that money with local governments.

Sen. Heather Cloud, a Turkey Creek Republican, has proposed using some of the local portion to set up a $200 million fund to boost small businesses that shut down or limited their operations as part of the effort to contain the pandemic.

“Some businesses had to close entirely, while others have operated at reduced capacity,” Dawn Starns, who heads the Louisiana chapter of the National Federation of Independent Business, said in support of the idea. “Either way, it may take months before revenue returns to normal.”

State officials don’t think local leaders have had enough direct COVID-19 expenses to use all of the money, but they won’t know for sure until the applications come in. Edwards said Congress might retroactively change the CARES act rules and allow local governments to use their money to plug budget holes, which would expand how much of the money local officials can spend.

Edwards said Congress might also approve more money for businesses. He said a special session in the fall, when lawmakers know what the federal government has and hasn’t done and how the economy is recovering, would be a better time to consider the idea of a dedicated fund. Using the money to shore up the state’s unemployment insurance fund might also be worth considering, he said, noting that business owners pay more taxes when the fund falls below $750 million.

On Wednesday, state health officials reported 798 COVID-19 patients were in hospitals, the first time in two months fewer than 800 coronavirus patients were hospitalized. The disease has killed at least 2,617 Louisiana residents so far, officials said.

More than 38,000 confirmed cases have been reported in the state, and officials believe almost 29,000 of those patients have recovered. Louisiana is currently ninth in the nation for COVID-19 cases per capita, Edwards said.

The Louisiana Department of Revenue is waiving penalties for state sales tax returns in April and May. The deadline to file is moved back to June 30, and companies that can’t pay by then still can avoid penalties by entering into a payment plan.

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