BATON ROUGE, La. (AP) — Republican lawmakers moved ahead Thursday with plans to carve out $300 million in federal coronavirus aid that Gov. John Bel Edwards wants to steer to local government agencies to instead create a small business assistance program.
The Democratic governor intended to use an $811 million slice of federal aid from Congress to reimburse local government agencies — sheriff’s offices, city councils, school districts and more — for their coronavirus expenses.
The House voted 73-25 for legislation that would divvy up that money differently, steering $511 million to municipal government expenses and spending $300 million on grants to small businesses damaged by the virus, under a program that would be managed by Republican Treasurer John Schroder.
“It’s about the thousands and thousands of people that small businesses employ,” said Republican Rep. Tony Bacala of Prairieville.
The plan was written by GOP legislative leaders and added into a bill by Republican Sen. Mack “Bodi” White. The measure heads to the Senate for review and a final vote.
Edwards opposes the legislative proposal, and several lawmakers raised concerns Thursday about shortchanging local government agencies struggling to respond to the virus outbreak. The Louisiana Municipal Association objected to the plan.
“This bill isn’t the locals against small business. They’re both going to be helped,” said Rep. Dodie Horton, a Haughton Republican.
New Orleans Mayor LaToya Cantrell panned the bill in a statement as “irresponsible and immoral.” She said local government agencies in her region, which was hardest hit by the virus, need all the help they can get.
“The current version of this bill would yank away desperately needed funds from local governments. The health of our people, and the health of our economy, are critical to the health of the state. Tearing away money from local governments threatens all of it,” Cantrell said.
Under the bill, Schroder would have to announce by July 1 when the business grant program will begin.
To be eligible, businesses would have to be located in Louisiana. They couldn’t have had more than 50 full-time workers as of March 1, before Louisiana saw its first confirmed case of the COVID-19 disease caused by the coronavirus. They couldn’t be a subsidiary of or owned by a larger company with more than 50 full-time employees. And they would have to show an interruption in operations because of the virus.
Of the $300 million allocated to the program, $40 million would be set aside to assist minority-owned and women-owned businesses.
For the first 21 days, grants only would be available to businesses that didn’t receive other federal aid through the Paycheck Protection Program or through a U.S. Small Business Administration disaster loan and that didn’t receive business interruption insurance dollars.
Rep. Chad Brown, a Plaquemine Democrat who voted against the bill, raised concerns that the proposal allows Schroder to keep up to $24 million of the money to cover administrative expenses.
“That’s a lot of money,” Brown said.
The federal aid at issue comes from $1.8 billion in direct congressional relief that Louisiana received to respond to COVID-19. Lawmakers and Edwards are planning to use nearly $1 billion to help balance the state budget. The dispute is over the remaining $811 million.
The Edwards administration already has drawn up plans for disbursing the money to local government, in line with federal guidelines requiring its use for virus-related expenses. The state planned to send out the first payments in July.
But Commissioner of Administration Jay Dardenne, the governor’s chief budget adviser, has repeatedly told lawmakers that local government agencies likely wouldn’t have enough COVID-19 expenses to use up all $811 million unless Congress changes the rules to allow broader use of the money to plug budget gaps.
Republican supporters of the legislative spending plan pointed to Dardenne’s comments as boosting the proposal to use some of the money for business grants. But Rep. Rodney Lyons, a Harvey Democrat, said if Congress reworks the regulations, local government agencies could be missing out because lawmakers are spending the money on business.
