Aid dollars may be shifted to shore up Road Home grant program

Louisiana may have to pull money from other hurricane aid programs to stave off a projected $3 billion shortfall in Road Home, the program that provides rebuilding grants to homeowners, the head of the Louisiana Recovery Authority said Friday.

Money would be shifted from business grants and rental property repair programs, said Andy Kopplin, executive director of LRA, which created Road Home to give grants to homeowners with severe damage from hurricanes Katrina and Rita.

State officials earmarked $7.5 billion in federal hurricane relief aid to pay for Road Home grants, but more people applied than expected and they are receiving bigger awards than projected. Officials say that without the additional money, nearly 17,700 applicants may not receive grants, which can range as high as $150,000.

Kopplin said LRA may ask state lawmakers to approve a temporary shuffling of other federal recovery dollars to Road Home to keep grants flowing while state officials look for other ways to keep the program from going broke.

Congress sent Louisiana $10.4 billion in flexible recovery aid dollars, called Community Development Block Grant money, after Katrina and Rita devastated New Orleans and the state’s coast in August and September 2005.

Most of the money was set aside for homeowner aid, but some has been targeted for business loans and grants, rental property repair, workforce training, college education and research programs, and state and local building repairs.

LRA is considering moving some dollars not yet spent n including money for business loans and grants and repairs to small rental units n to homeowner grants. Such a move would require legislative approval.

“We may have to recommend the temporary allocation of CDBG dollars from other projects to make sure homeowners are served,” Kopplin told the Legislature’s joint budget committee.

The program has enough money to cover grant awards for several months, Kopplin said.

Some lawmakers want to use part of a $2 billion in unspent state general funds to help cover the Road Home shortfall. Republican U.S. Sen. David Vitter said the state must use some of its own money to solve “a sizable percentage” of the problem.

“If leaders at the federal level are going to be any part of the solution, they absolutely want to see leadership and action at the state level first,” Vitter wrote in a letter this week to Blanco, Senate President Don Hines and House Speaker Joe Salter n all Democrats n and also to leaders of the Republican legislative caucus.

Blanco has said federal officials should find more funding to keep the program going because LRA used damage estimates provided by the Federal Emergency Management Agency to develop the price tag for Road Home. She has been negotiating with the White House’s Gulf Coast recovery czar for additional aid, but none has been promised.

More than 137,000 people have applied for aid through Road Home, and about 17,600 have received grants, according to latest available statistics.

Kopplin said storm damage was worse than FEMA estimates suggested, more people were eligible for Road Home than expected and insurance proceeds covered less of the damage than projected.

“You have more homeowners and more damage,” he said.