Monday, May 20, 2024

Edwards signs $300 million grant program bill for businesses affected by COVID-19

by BIZ Magazine

By David Jacobs | The Center Square

Gov. John Bel Edwards has signed into law a proposal to use $300 million in federal pandemic relief dollars to help small businesses harmed by the COVID-19 pandemic and response.

Edwards previously had expressed concerns about the grant program approved by the Repulican-controlled legislature. The money would come out of local governments’ portion of $1.8 billion from the federal CARES Act, and the governor said he wanted to make sure they were made whole before dedicating the money to other purposes.

But legislators who voted to create the fund cited the Edwards administration’s public statements that local officials were unlikely to be able to use the $811 million set aside for them for pandemic response, since the state has shouldered most of those expenses.

Supporters said many businesses that shut down or limited operations as they were ordered to do by state leaders can’t afford to wait for help and may close permanently without assistance.

Under the plan, $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. Grants will not exceed $15,000.

Edwards vetoed House Bill 846, which also was pitched as a way to help businesses affected by the pandemic. The proposal would have allowed retail and food service businesses with fewer than 50 employees to get a payroll subsidy from the state.

Unlike some other Louisiana programs that subsidize job creation, companies would not have to pay high wages or offer benefits to qualify.

“While the fiscal note does not provide the exact amount of a decrease in collections of state general funds due to this program in the upcoming fiscal year, the eligibility requirements of the program create such a large pool of businesses that will be eligible to participate that there is potential that the cost to the state could be substantial,” Edwards says in his veto message. “With so much uncertainty surrounding the state’s economic stability in the wake of COVID-19, beginning a new program without truly understanding the direct effect on the upcoming fiscal year would not be prudent.”

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