Louisiana Gov. John Bel Edwards has signed a Republican-crafted plan to spend $300 million in federal coronavirus aid to help small businesses recover from the outbreak, agreeing to a grant program that peeled off dollars he initially planned to use elsewhere.
The dollars come from direct federal aid allocated to Louisiana by Congress to respond to the COVID-19 disease caused by the coronavirus.
Edwards intended to steer about $811 million of the federal assistance to local government agencies — such as city councils, parish police juries, sheriffs’ offices and more — to reimburse them for virus-related expenses.
Republican state lawmakers chose to divvy that money up differently, carving out $300 million for small business grants and using the remaining $511 million to reimburse municipalities for their virus spending. The bill by Sen. Mack “Bodi” White passed during the regular session that ended June 1.
Edwards’ spokeswoman Christina Stephens confirmed on June 15 that the Democratic governor signed the measure into law.
While Edwards agreed to create the business grant program, he vetoed a separate measure that would have offered a new payroll rebate to virus-impacted businesses. The bill by Republican Rep. Mark Wright, of Covington, received final passage with overwhelming House and Senate support. But it could have cost the state millions, according to a financial analysis, and the exact drain on the treasury wasn’t clear.
The governor, who has unsuccessfully sought to raise Louisiana’s minimum wage, objected because the payroll subsidy wouldn’t have prioritized higher-paying jobs and instead would allow any business creating five new, minimum-wage jobs to qualify.
In his veto message, Edwards called such an incentive “contrary to the sentiment of the people of Louisiana that our workforce should be able to earn a true living wage.” He also said Louisiana shouldn’t be creating programs with a sizable price tag amid the economic uncertainties of COVID-19.
Edwards’ signing of the business grant program legislation came although New Orleans Mayor LaToya Cantrell had asked him to veto it.
“Given the crucial needs of our city and the direct impact of the COVID-19 pandemic on New Orleans, it is frustrating to have to return to Baton Rouge to fight for every penny — but that is the path (the bill) creates for local governments,” the mayor’s spokesman Beau Tidwell said in a statement Monday.
In hopes of easing Edwards’ concerns about municipalities, lawmakers are advancing a separate bill in the ongoing special session that would add another $54 million in federal coronavirus aid to the local government reimbursement effort. If the measure wins final passage, that would boost the total available to municipalities for COVID-19 expenses to $565 million.
While the Edwards administration will divide the dollars among municipalities, Treasurer John Schroder will manage the business grants, called the Main Street Recovery Program.
The Republican state treasurer is required to submit a plan to lawmakers this week for distributing the grants. Even before Edwards’ bill signing was announced, Schroder started seeking proposals from contractors interested in running the program.
To be eligible, businesses have to be located in Louisiana. They can’t have had more than 50 full-time workers as of March 1, before Louisiana saw its first confirmed case of COVID-19. They can’t be a subsidiary of or owned by a larger company with more than 50 full-time employees. And they have to show an interruption in operations because of the virus.
Of the $300 million allocated to the program, $40 million is guaranteed to be spent on grants to assist minority-owned, women-owned and veteran-owned businesses. Schroder can keep up to $15 million of the cash to administer the program.
For the first 21 days, grants only will be available to businesses that didn’t receive other federal aid through the Paycheck Protection Program or through a U.S. Small Business Administration disaster loan and that didn’t receive business interruption insurance dollars.
The federal aid comes from $1.8 billion in direct congressional relief that Louisiana received to respond to COVID-19. Most of the money is being used to fill state budget shortfalls amid the pandemic.
The bills are Senate Bill 189 and House Bill 846.
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