Landrieu Corrects Flawed Formula for Disaster Loan Cancellation
Change expected to help St. Tammany, Jefferson, St. Bernard parishes in effort to cancel loans
WASHINGTON — A provision authored by U.S. Senator Mary L. Landrieu, D-La., that fixes a flawed formula preventing the cancellation of $286.7 million in Community Disaster Loans (CDLs) in many Southeast Louisiana communities is on its way to the President for his signature. Sen. Landrieu's provision corrects the formula under which cancellations of CDLs from Hurricanes Katrina and Rita are considered and is part of the continuing resolution that funds the day-to-day operations of the federal government. The bill received overwhelming bipartisan support in the Senate yesterday and in the House this morning.
"I have been fighting for several years to replace this flawed formula with one that is sensible and fair and that reflects local budgetary realities. Today is a victory for the people of St. Tammany and Jefferson parishes, along with other communities in South Louisiana hit by Hurricanes Katrina and Rita," Sen. Landrieu said. "This will provide additional relief from this unfair debt burden, and help communities to avoid reductions in essential services and prevent layoffs of deputies, teachers and emergency responders."
The old formula failed to recognize necessary expenses; penalized communities for revenues that are otherwise dedicated; and omitted budgetary circumstances beyond the three-year period following the disaster.
The new, corrected formula Sen. Landrieu authored is expected to result in additional cancellations of the remaining $286.7 million in outstanding debt among Louisiana communities, including: $67.8 million for St. Tammany School Board; $12.2 million for St. Tammany Parish Government; $9.9 million for St. Tammany Sheriff's Department; $54.8 million for the Jefferson Parish Government; $9.1 million for St. Bernard Sheriff's Department; $4.5 million for the St. Bernard School Board; $8.9 million for Plaquemines Parish Government; $3.16 million for Plaquemines Sheriff Department. Additional communities in Cameron, Vermilion, LaFourche, Washington and Orleans parishes are also expected to benefit.
Jefferson Parish President John Young said: "I want to thank Senator Landrieu for her tremendous efforts in securing the much needed language that will allow Jefferson Parish to have FEMA reconsider the cancellation of our CDL Loans. The Senator's recognition and effort in changing the process and accounting approaches in which FEMA examines the Parish's CDL loan will go a long way to achieving the forgiveness the citizens of Jefferson Parish so much deserve. Senator Landrieu has led this effort over the years, and we greatly appreciate her tireless efforts. The newly adopted method of calculating loss will benefit any community sustaining long-term economic consequences of a natural disaster. This benefits not only the citizens of Louisiana, but all of our neighbors across the land who reach out for help when catastrophe strikes."
St. Tammany Parish President Pat Brister added: "St. Tammany Parish is extremely grateful for the Continuing Resolution that has just passed in the U.S. House and Senate, with language that will allow FEMA to reevaluate our application for forgiveness of our Katrina Debris Loan. This has been an arduous battle for several years and it is a giant step toward ultimately having this loan forgiven. I want to particularly thank Senator Mary Landrieu for her hard work and dedication in getting this language in the bill that just passed Congress. We also appreciate the cooperation of our federal delegation."
Sen. Landrieu has time and time again sought legislative and other solutions to help the effected communities with outstanding loans. In 2007, Sen. Landrieu authored a provision to restore the possibility of loan forgiveness and nullify Republican legislation in 2005 that made it outright impossible under any circumstances. As a result of Sen. Landrieu's 2007 provision, FEMA has cancelled $602 million in debt that Louisiana communities (approximately 60 percent) would otherwise be required to repay under the Republican legislation that originally authorized the loans.
In 2010, Sen. Landrieu convened a three-hour meeting with FEMA Administrator Craig Fugate and representatives from eight Louisiana parishes in her office to explain to FEMA officials how the formula did not accurately calculate a parish's revenue and expenses for determining whether an applicant met the forgiveness requirements.
As the Senate worked earlier this year on a disaster relief bill for communities and regions hard hit by disasters in 2012, Sen. Landrieu included and passed today's same provision in the Senate bill that died as a result of House inaction in December 2012. When the House passed a smaller, revised version in January 2013, it stripped this provision from the bill.
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