Sunday, June 16, 2024

House votes to create $300 million business fund

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana House of Representatives on Thursday voted to set aside $300 million in federal pandemic relief aid for small businesses.

The federal CARES Act sent $1.8 billion to Louisiana state government. Up to 45 percent of that money could be shared with local governments.

While state officials don’t know how much of the $811 million local governments will be able to spend, they don’t expect local officials have incurred nearly that much in pandemic-related expenses, which mostly were borne by the state. However, there is a fair amount of flexibility in how the CARES funding can be used, and Congress may change the rules to allow local governments to use the money to plug budget holes and maintain services.

Under the plan the House approved Thursday, $300 million of the local portion would be put into a state treasury fund to distribute grants to businesses with 50 or fewer employees; $40 million would be reserved for businesses owned by women, minorities and veterans. For the first 21 days the money is available, only businesses that haven’t already received federal relief from another program would be eligible.

As requests come in for the $511 million for local governments and the $300 million in business grants, the Joint Legislative Committee on the Budget would be able to move money from one pot to the other as needed.

Some representatives said they wanted to make sure local governments were made whole before setting aside money for other purposes. Rep. John Illg, a River Ridge Republican, said local leaders in his area weren’t happy with an earlier proposal that would have used $200 million for a business fund.

“At $300 million, my phone won’t stop,” he said.

But other members said it was important to get help to struggling small businesses as quickly as possible, noting that such businesses are an important part of every local tax base.

Rep. Jerome Zeringue, the Appropriations chairman who presented the plan, said the fund as currently conceived would not be off limits to businesses that are doing well.

“I would hope they wouldn’t take advantage of the system,” he said.

Gov. John Bel Edwards is opposed to the plan. He said a small business fund might be a good idea but suggested it would be better to make that decision in the fall when lawmakers know how well the economy is recovering and whether Congress has approved additional funds for businesses or local governments.

New Orleans Mayor LaToya Cantrell, whose city suffered one of the worst COVID-19 outbreaks in the nation, urged legislators to reject the plan.

“The current version of this bill would yank away desperately needed funds from local governments,” she said.

The plan was attached to Senate Bill 189, which now heads back to the Senate for consideration.

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