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Flood Costs Keep Clouds in Place Over Louisiana

Mark Carroll

LSU Economist Dr. Jim Richardson issued an estimate Monday, saying it will be a year before Louisiana recovers and the economic impacts of this flood are fully known.

Asked about the cost of the flood response and recovery earlier, Governor John Bel Edwards is reluctant to guesstimate a number.

“It’s huge, but I don’t really like to dwell on the economic impact in terms of the state Treasury. The toll right now is on people,” the governor said, adding, “The fiscal condition of this state is not going to limit what we do to make sure the people get the assistance that they need.”

One thing state officials will say is that the federal disaster declaration guarantees Louisiana won’t have to absorb the entire cost.

“Right now, we’re looking at a 75-25 federal match. We’re hoping at some point that we get to a 90-10 match,” Commissioner of Administration Jay Dardenne explained to the Bond Commission late last week.

“What do you think our chances are of getting the 90-10?” Treasurer John Kennedy asked.

“About 90-10,” Dardenne replied, prompting rueful laughter from commission members.

Gallows humor aside. Senate President John Alario – who has dealt with numerous disasters during his 46 years in the legislature – urged extreme caution with any other state spending.

“We’re going to have a great need in this state to match the FEMA requirements of the 25-percent match, hoping we’ll get a better result of that from the Congress, but we don’t know at this point as to what’s going to happen,” Alario warned. “So we have to be very, very careful on any amount of moneys we’re spending at this point.”

Dardenne reminded officials that FEMA doesn’t pay up front—the state does.

“The process with FEMA is a reimbursement. We have to spend the money first, and then get reimbursed.”

In other words, the state pays 100-percent now, then bills the feds for 75-percent of what is spent.

Louisiana was already looking into taking out a “revenue anticipation note”, as regular expenses mount up early in the fiscal year (which began July 1), while the bulk of revenue doesn’t come in until next spring.

“It’s going to be a significant financial undertaking for the state at a time where – as we all know – we’ve got problems already,” Dardenne stated.