Isaac could eat into La. budget
During a budget crunch, state government could be forced to scrape together millions of dollars for expenses tied to Hurricane Isaac, officials say.
The Category 1 storm heavily flooded St. John the Baptist and Plaquemines parishes.
Even though state officials say they are confident that the federal government eventually will pick up at least 90 percent of storm costs, the damages have yet to reach the threshold. Some legislators express worry about how the gap will be filled. Whatever the federal government does not pay, state taxpayers will have to, according to the federal recovery program regulations. The amount could be tens of millions of dollars from a state budget already suffering from not enough revenue.
Federal and state governments traditionally share the cost of responding to a storm and repairing the damage. Shelters are set up. Meals are distributed. Roads are cleared of debris. The expenses add up.
So far, the level of emergency work and other expenses only qualifies Louisiana for the federal government’s help with 75 percent of costs, said Christina Stephens, spokeswoman for the Governor’s Office of Homeland Security and Emergency Preparedness.
Damage stands at $474 million. For the federal government to pick up 90 percent of expenses, costs need to surpass $593 million, Stephens said.
She said the state still is determining coastal damage, which could add to the expense total. “We feel confident that we’re going to ultimately qualify for a lessened cost share for Hurricane Isaac,” Stephens said.
Congress committed the federal government to paying 100 percent of state and local governments’ eligible expenses from hurricanes Katrina and Rita in 2005. For Hurricane Gustav in 2008, the federal government picked up 90 percent of the tab.
To date, the state has spent $135 million responding to Isaac, which hit in late August, Stephens said. The state will have to pick up $33 million of those costs, unless the cost of responding and repairing grows by roughly $100 million.
At the same time, the state is struggling to pay health care expenses and is grappling with extensive cuts in higher education funding.
Based on strong corporate tax collections, state economists expect the state to reap a $130 million surplus from the budget year that ended June 30.
However, the governor’s aides say he wants to use the bulk of that money to plug holes in the Medicaid program that provides health care to the poor.
Legislators started tackling storm-related bills Friday.
They agreed to tap a $17.4 million state emergency fund to pay $4.7 million for military expenses and for meals provided at shelters.
The military expenses mainly stem from the activation of 6,000 Louisiana National Guardsmen for the hurricane. The state had to pay the guardsmen, put them in hotels, fuel their vehicles and fly search-and-rescue missions.
Military pay alone is expected to cost federal and state governments $9.8 million with aviation expenses adding another $1.8 million.
Louisiana House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, predicted the state quickly will drain the State Emergency Response Fund, called SERF.
“This basically zeroes out our SERF fund,” Fannin said during a meeting of the state Joint Legislative Committee on the Budget.
Barry Dussé, state director of planning and budget for the Jindal administration, said the storm hit roughly two months into the start of the state budget year. He said state agencies have not had time to exhaust what they were budgeted before the storm hit.
He said storm costs typically are paid over time.
“Hurricane season fortunately is at the beginning of the fiscal year,” Dussé said. “We’ll be more than likely back in front of you through the subsequent months.”