Landrieu: Loan Cancellations Will Save Communities $35.6M
WASHINGTON — Today, U.S. Senator Mary L. Landrieu, D-La., announced that $35.6 in Community Disaster Loans (CDLs) for nine Louisiana community entities have been cancelled under a provision that Sen. Landrieu authored as part of her fiscal year 2013 Homeland Security Appropriations bill. The provision fixed a flawed formula that prevented the cancellation of $286.7 million in CDLs in many Southeast Louisiana communities.
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. Sen. Landrieu said that the current cancellations are based on three-year data, and that she is hopeful to see more cancellations once five- and seven-year data is taken into account.
"It is a great victory for our communities that more than $35 million in loans have been cancelled. These communities now have relief from this unfair debt burden which will help them avoid layoffs of essential personnel like teachers, first responders and deputies. As we move forward and more years of data are scrutinized, I am hopeful that additional cancellations will bring more relief to our communities," Sen. Landrieu said.
Under Sen. Landrieu's provision the following loans have been fully cancelled
Washington Parish Sheriff's Department
Town of Jean Lafitte
Town of Grand Isle
City of Slidell
Village of Folsom
Sewerage & Water Board of New Orleans
Orleans Levee District
Regional Transit Authority (Orleans Parish)
Orleans Parish Communication District
As the Senate worked late last year on a disaster relief bill for communities and regions hard hit by disasters in 2012, Sen. Landrieu included and passed this 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.
Sen. Landrieu has time and time again sought legislative and other solutions to help affected 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. Without this legislation, these communities would have had to repay every penny. As a result of Sen. Landrieu's 2007 provision, FEMA previously 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.
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