Home » Louisiana to begin spending $811 million in federal COVID-19 aid

Louisiana to begin spending $811 million in federal COVID-19 aid

by Will Phillips

(The Center Square) – More than 450,000 Louisiana small businesses may be eligible for grants under a federally funded COVID-19 relief program, State Treasurer John Schroder said Monday.

The Louisiana Main Street Recovery Program fund contains $300 million. So if Schroder’s estimate is close to accurate, the grants for each business could be less than $700, though there is no way to know yet how many will apply or how much they will request. The maximum possible grant amount is $15,000.

“It’s not going to go far,” Schroder said. “I hope we run out of money. I hope we’re standing here four months from now and we’ve given out every penny.”

The federal government allocated $1.8 billion to Louisiana’s state government. Initially, $811 million was to be set aside for local governments, though Louisiana lawmakers decided to carve out $300 million from the local portion for the business fund.

The Joint Legislative Committee on the Budget, which met Monday, oversees how the money is spent. Schroder’s office is responsible for the business fund, which he expects to launch in early July. The office has issued a request for qualifications to find a consultant for the program, he said.

Companies must have no more than 50 employees and be based in Louisiana to be eligible. For the first 21 days, companies that already have obtained disaster assistance from the federal government or an insurance payout are not eligible. Examples of qualified expenses include losses caused by mandated closures or decreased customer demand, or costs associated with extensive cleaning or buying personal protective equipment.

The state law, passed during this year’s regular session, calls for $40 million to be set aside for minority-owned businesses. Schroder said that portion of the fund will be doled out through what essentially will be a separate program.

House Speaker Clay Schexnayder said he wanted the money to get out as quickly as possible. While the Louisiana Legislative Auditor will help to ensure only eligible expenses are compensated, Schroder said he didn’t want to slow down payments to the 90 percent of people he expects to follow the rules to try to stop the other 10 percent, which he said is about the national average for fraud.

Gov. John Bel Edwards’ Division of Administration is distributing the $511 million currently allocated to local governments. The first round of reimbursements totaling $153 million will start going out next week, Commissioner of Administration Jay Dardenne said. Nov. 1 will be the latest possible deadline to apply for the program, which must exhaust its funds by the end of the year or else send the remaining money back to the federal government.

Any money local officials don’t claim can be shifted to the business fund, though Dardenne doesn’t think there will be much if any left over. The state’s formula for deciding the maximum amount any parish could be eligible is based 70 percent on their number of COVID-19 cases and 30 percent on population, Dardenne said.

Rep. Blake Miguez, an Erath Republican, urged the administration to do more to work with local leaders to ensure everyone gets their fair share. Rural parishes that don’t have large staffs and may not fully understand how the program works might otherwise be at disadvantage compared to governments in larger cities, he said.

David Jacobs, Staff Reporter for the Center Square, is a Baton Rouge-based award-winning journalist who has written about government, politics, business and culture in Louisiana for almost 15 years. He joined The Center Square in 2018.

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