State, feds argue over rules for money eyed for Road Home program

A fight between state and federal officials over $1.14 billion in requested federal aid is a big reason why state officials say the Road Home program is on track to run out of money before all eligible hurricane-affected homeowners are bought-out or get money to rebuild.

Current estimates project the federally funded Road Home program could fall about $2.9 billion short of compensating all eligible applicants with its current $7.5 billion budget. Take out the $1.14 billion the state has requested from the Federal Emergency Management Agency, and the deficit swells to more than $4 billion, with Road Home on pace to obligate all its funds by the end of next month with thousands of fully vetted applications left in the pipeline.

Earlier this year, FEMA rejected the state’s application for aid to buyout homeowners through Road Home, citing in part the state’s decision to exempt older residents from a 40 percent penalty for not buying a new house in Louisiana. FEMA also believes a state plan to use money from the hazard mitigation grant program violates federal law, including a provision requiring that property bought by a local or state governments with hazard mitigation dollars be converted to parks or other green space.

But the executive director of the Louisiana Recovery Authority, Andy Kopplin, said he can’t see why the matter can’t be settled with simple accounting n using different pots of federal money to buy properties and assigning specific funds to each purchase after local leaders decide where to have green space.

The Bush administration says the law must be followed, and Donald Powell, the federal coordinator for Gulf Coast recovery, said the state decided on its own to use hazard mitigation money to fatten the Road Home budget. His office is trying to get the state to use hazard mitigation funds outside of Road Home n and in the traditional sense, for protective measures such as elevating homes, installing storm shutters and putting repeatedly flooded properties out of commerce permanently.

Kopplin last week told the LRA he wasn’t optimistic that the state could agree with FEMA on use of the money. “The only option at this point is congressional action,” Kopplin said.

Sen. Mary Landrieu, D-La., plans to hold a congressional hearing May 24 in Washington on what is behind the expected Road Home shortfall.