Saturday, April 13, 2024

Gov. Edwards’ commuter rail investment comes at the expense of wronged Road Home recipients

by BIZ Magazine


Don’t you love that feeling when you’re doing the laundry and you find forgotten, crumpled cash in a pants pocket? But after that brief euphoric moment and weak laugh at the “money laundering” joke that goes through your head, you realize that you should probably do a better job managing your cash. 

Perhaps you even have a bit of remorse if you end up spending that small surfeit unwisely.     

The state of Louisiana finds itself in a similar situation with a surprise $20.5 million surplus courtesy of the U.S. Department of Housing and Urban Development (HUD). The state had set aside the funds for a settlement with the federal government over misspent Road Home grant money after Hurricane Katrina in 2005, but HUD informed Louisiana earlier this summer it could keep its cash. 

The Advocate reported Aug. 18 that the money would be put toward a proposed commuter rail line between New Orleans and Baton Rouge. The $20.5 million would be paired with $30 million in state construction funds to attract federal grants. One of the awards Louisiana seeks is an $86 million grant to upgrade the rail bridge over the Bonnet Carré Spillway, a section considered a linchpin for the route.

Gov. John Bel Edwards and advocates for the commuter rail line make a strong case for the project. It has the potential to spur economic development on a regional level and address persistent traffic issues along the Interstate 10 corridor, a problem that will only worsen when widening work and the new Mississippi River bridge are undertaken.

Using the HUD settlement money for the rail line has to feel like salt in the wounds for the Road Home recipients from whom the state clawed back $6.8 million in grants. They learned in February they would not be compensated when Edwards and U.S. Housing Secretary Marcia Fudge announced the end of the Road Home program, and along with it the termination of 3,500 lawsuits against homeowners who had received and spent grants. 

“It’s been a miserable thing for the state of Louisiana to pursue these individuals because we knew the vast majority of them were never going to pay,” Edwards said in February.

The governor and officials gathered at a community center with residents of New Orleans’ 9th Ward neighborhood — among the hardest hit in Katrina — to make the announcement, no doubt taking advantage of the favorable optics to deliver good news.

Not in the room were the 425 Road Home recipients who the state had taken to court and defeated. When you look at some of the questionable reasons these homeowners were forced to return the money, it explains why they are incensed.

Reporting from journalists Richard A. Webster of Verite and David Hammer at WWL-TV, in partnership with The Times-Picayune and ProPublica, revealed problems with the Road Home program from its onset. To get a grant, homeowners had to agree to elevate their homes, yet the $30,000 provided was often inadequate and failed to cover additional storm damage. Worse yet, the state failed to check whether homeowners qualified for the money or used it to elevate their houses. 

Multiple appellate court rulings backed homeowners’ claims that they were told the Road Home money could be used for other repairs. State officials have said they don’t know who told the homeowners this. 

Edwards’ Commissioner of Administration Jay Dardenne has said a state appropriation to reimburse the Road Home defendants would likely violate the Louisiana Constitution, which prohibits state government from directing money to an individual. The governor’s office has not sought a confirming opinion on this interpretation from the attorney general, though most agree the intent of the law was to thwart corruption.

The Edwards administration maintains dropping the Road Home lawsuits does not imply money was wrongfully recovered from recipients in the decided cases, nor that the pending cases were illegitimate. But we’ve also seen the state government have a hard time admitting that it did anything wrong.

It’s why you can expect state officials to stay the course on how they intend to spend the Road Home settlement money. Doing otherwise — and doing right by 425 homeowners — would be admitting fault, and the train of progress stops for no one.

Greg LaRose is editor of the Louisiana Illuminator and has covered news for more than 30 years in Louisiana.

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