Delegation urges hurricane loan forgiveness

Published 2:53 am Sunday, December 21, 2008

Members of Louisiana’s congressional delegation are calling on the Federal Emergency Management Agency to issue regulations for the cancellation of disaster loans issued to Gulf Coast communities after hurricanes Katrina and Rita.

The lawmakers wrote a letter this week to FEMA Administrator R. David Paulison urging regulations by the end of the year.

Some local governments, hospitals, sheriffs’ departments and other governmental entities that received loans won’t be able to repay them, the state’s two senators and four of its representatives wrote.

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“The absence of any regulatory structure has left these communities without guidance to prepare them for independent audits and has restricted their ability to conduct out-year budget planning,” the letter said.

FEMA said it provided nearly $1.3 billion in community disaster loans in Louisiana and Mississippi after the 2005 hurricanes. Congress last year authorized the agency to forgive the loans if a local government’s revenue does not cover operating budgets for three fiscal years after the disaster.

FEMA statistics show 96 loans, totaling almost $1 billion, were provided to local governments and other governmental entities in Louisiana. Loans to Mississippi totaled nearly $271 million.

The agency must issue regulations before it can cancel loans or even take applications from communities seeking cancellation. No loans must be repaid before November 2010, FEMA has said.

Immediate action is needed or local governments will face serious budget problems, said U.S. Rep. Steve Scalise, R-La.

“These loans have helped Louisiana communities get back on their feet, and the president has historically forgiven these loans following major natural disasters,” Scalise said. “Congress has already done its part to have these loans forgiven. Now FEMA needs to act.”