Kennedy ready to assist local governments in expediting recovery funding
5th September 2012 · 0 Comments
The Louisiana Department of the Treasury and the State Bond Commission are offering financial assistance to local governments hoping to jump-start recovery from the impact of Hurricane Isaac this past week. State Treasurer John Kennedy is offering emergency short-term financing to pay for hurricane preparation and rescue and response efforts in anticipation of delayed federal aid.
“Our citizens don’t have time to wait to begin the difficult work of hurricane recovery,” said Kennedy.
Kennedy, who is chairman of the State Bond Commission, said there are many financing options for local governments to explore, including Revenue Anticipation Notes (RANs) which allow them to borrow immediate cash from the capital markets backed by future federal aid. Local governments could also raise capital through “1430” loans based on LRS 39:1430.
According to recent reports, FEMA may need to ask Congress for more money, as it currently has only $1.5 billion in its Disaster Relief Fund, which will be split among the open major disaster declarations across the nation including several wildfires, severe storms, tornadoes and floods in addition to Hurricane Isaac. Disaster-modeling companies have issued preliminary overall public and private damage cost estimates of $500 million to $2 billion for Hurricane Isaac.
“If our local leaders want to seek short term financing while the state, FEMA and Congress engage in their usual tug-of-war over how much and when, we are ready to work with them and act quickly,” said Kennedy.
Current pressures on the federal budget have made it difficult for Congress to pass FEMA emergency spending bills in recent years and may cause delays in funds reaching Isaac-impacted areas. State leaders are pushing for an expedited disaster declaration and federal reimbursement of 100% of the $8 million the state itself has already spent on storm preparations, and the costs are expected to climb as damage assessments are updated daily.
“Response and recovery can’t wait,” said Kennedy. “With federal and state funding timelines in question, we want to let our local governments know that the State Treasury will work with them to keep the recovery moving forward.”
This article originally published in the September 3, 2012 print edition of The Louisiana Weekly newspaper.