DALLAS — Revenue anticipation notes are a short-term option for Louisiana communities facing expensive hurricane-related response and recovery efforts until long-term assistance begins flowing, State Treasurer John N. Kennedy said Tuesday.
“Our citizens don’t have time to wait to begin the difficult work of hurricane recovery,” Kennedy said. “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.”
In addition to the notes supported local revenue or by promises of federal aid, Kennedy said the local governments may be eligible for loans from the IRS.
“Response and recovery can’t wait,” he said. “With federal and state funding timelines in question, we want to let our local governments know the state treasury will work with them to keep the recovery moving forward.”
No special session of the State Bond Commission is expected before the monthly session on Sept. 20, Kennedy said.
“I talked with some of our local officials, but they’re still in the response stage,” he said. “I just wanted them to know that if they have financial problems, the State Bond Commission is here and ready to help.”
Kennedy said expects the Federal Emergency Management Agency to ask Congress to put more money into its Disaster Relief Fund. The fund has only $1.5 billion to respond to federal disaster declarations across the county that currently include several large wildfires, floods, and tornadoes
The latest estimates for public and private costs and losses from Hurricane Isaac range from $500 million to $1.5 billion, Kennedy said.
“It’s going to be an expensive storm,” he said. “But we’re going to be all right.”
Isaac was an unusual storm because it moved slowly once it hit land, Kennedy said, resulting in heavy rainfall for many hours in the same spot.
“Usually these storms are gone in a few hours,” he said. “This one stayed around for days.”
Hurricane Isaac hit the Gulf Coast on Aug. 28, the anniversary date of Hurricane Katrina’s landfall in 2005. So far, flooding and high winds have been blamed for five deaths in Louisiana and two in Mississippi.
FEMA said last week it would reimburse 75% of the state’s cost for hurricane protection and preparation efforts, removal of storm debris, and infrastructure repairs. The federal government reimbursed 100% of state and local government expenses from Hurricane Katrina and 90% of the costs from Hurricane Gustav in 2008.
FEMA has also authorized federal assistance for temporary housing, repairs, and uninsured property losses in Ascension, Jefferson, Lafourche, Livingston, Plaquemines, St. Bernard, St. John the Baptist, St. Tammany, and Orleans parishes.
Gov. Bobby Jindal has requested the same assistance for residents of East Baton Rouge and West Baton Rouge parishes, and is seeking disaster food stamps for five of the hardest-hit parishes.
Louisiana had spent $56.4 million on storm efforts as of Sept. 1, including $38.4 million of supplies and $9 million for personnel expenses.
If the 75% reimbursement level is maintained, the state would be responsible for $14.1 million. Louisiana has a $16.4 million emergency fund.
Jindal asked the federal government to reimburse 100% of state and local expenditures from the storm before Isaac hit the coast.
“I ask that you exercise your discretion to approve the state’s pending request for all emergency protective measures,” Jindal said in a letter to President Obama and FEMA officials on Aug. 27. “Further, I ask that you consider a cost-share adjustment to eliminate the state’s non-federal share of the costs for this event.”
FEMA said Louisiana has reached the threshold for 75% reimbursement, based on damages of at least $1.35 per resident. If storm damages total $131 per resident of Louisiana, the reimbursement level would go to 90%.
State officials said Louisiana is almost at the 90% level.