POSTED: Tuesday, September 4, 2012 - 11:15am
UPDATED: Tuesday, September 4, 2012 - 11:19am
Baton Rouge, La — State Treasurer John Kennedy said the Louisiana Department of the Treasury and the State Bond Commission stand ready to work with local governments across the state if they need to seek emergency short-term financing to pay for hurricane preparation and rescue/response efforts or to jumpstart Isaac recovery efforts in anticipation of delayed federal aid.
"Our citizens don't have time to wait to begin the difficult work of hurricane recovery," said Treasurer Kennedy. "If our local leaders want to seek short term financing while the state, FEMA and Congress engage in their usual tug-of-war over how much and when, we are ready to work with them and act quickly."
Treasurer Kennedy, who is chairman of the State Bond Commission, said local governments may explore many financing options, including what are known as Revenue Anticipation Notes (RANs) which allow them to borrow immediate cash from the capital markets backed by future federal aid. Local governments could also raise capital through "1430" loans based on LRS 39:1430.
According to recent reports, FEMA may need to ask Congress for more money, as it currently has only $1.5 billion in its Disaster Relief Fund, which will be split among the open major disaster declarations across the nation including several wildfires, severe storms, tornadoes and floods in addition to Hurricane Isaac. Disaster-modeling companies have issued preliminary overall public and private damage cost estimates of $500 million to $2 billion for Hurricane Isaac.
Current pressures on the federal budget have made it difficult for Congress to pass FEMA emergency spending bills in recent years and may cause delays in funds reaching Isaac impacted areas. State leaders are pushing for an expedited disaster declaration and federal reimbursement of 100% of the $8 million the state itself has already spent on storm preparations, and the costs are expected to climb as damage assessments are updated daily.
"Response and recovery can't wait," said Treasurer Kennedy. "With federal and state funding timelines in question, we want to let our local governments know that the State Treasury will work with them to keep the recovery moving forward."