Louisiana will receive $438 million in federal funds for rebuilding from Gustav and Ike, the U. S. Department of Housing and Urban Development (HUD) announced Wednesday.

"We are certainly pleased that the federal government is beginning to award this much needed assistance to our state to help local communities in their recovery efforts,” Governor Bobby Jindal said. “This $438 million is a critical part of helping to get local communities back on their feet after Hurricanes Gustav and Ike and LRA Director Paul Rainwater will ensure that these funds go as quickly as possible to the communities who need them and are not delayed by unnecessary bureaucratic red tape."

Wednesday’s announcement is the first allocation of funds from the $6.1 billion pool of Community Development Block Grant (CDBG) funds Congress set aside earlier this fall for states affected by disasters in 2008, including Louisiana and Texas for hurricane damage and states in the Midwest for flooding. The state anticipates that HUD will allocate the remaining funds after the start of the New Year.

“We are thankful to the American taxpayers for their great generosity and we pledge that we will invest this allocation thoughtfully and responsibly to rebuild our state after these devastating storms,” said Paul Rainwater, executive director of the Louisiana Recovery Authority. “The benefits to restoring our communities stretch far beyond the borders of Louisiana. In addition to possessing a culture like no other, we are the second largest refiner of petroleum in the nation and we produce more than a quarter of the nation’s seafood and significant amounts of cotton, sugar cane and rice.”

“Unlike what happened after hurricanes Katrina and Rita, this time around, the federal government got the method for administering aid right by using actual damages to determine how much money each impacted state will receive. These first allocations were based on housing damages and we will be working to make sure that the federal government continues to understand the effect that Gustav and Ike had on our state and the importance of addressing our many unmet recovery needs, particularly in the areas of agriculture and fisheries,” Rainwater said. “The state also has streamlined its processes to push most of these dollars and the decision-making authority to parishes in hopes of designing smaller programs to address their critical local needs, rather than keeping all of the money and policy making at the state level, creating large-scale programs that are cumbersome to implement.”

“These funds cannot get to the state quickly enough. The federal government should allocate the remaining $4 billion to devastated areas as soon as possible so that recovery and rebuilding can begin in earnest in our communities,” Rainwater said.

To use federal CDBG funds, states must present action plans for federal approval. Louisiana began the process of writing an action plan for its funds in October. The LRA’s board in November approved the plan for public comment, which will begin in December.

As required by HUD, the state will publish the plan for a formal public comment period for 10 days. The LRA board will offer its final approval of the plan, including this first round of funding allocations, in December before forwarding the plan to the Joint Legislative Committee on the Budget for approval.

The state will set aside 25 percent of its total allocation for projects dealing with rental housing, agriculture and fisheries recovery, and hurricane protection. The bulk of the funds will be allocated to the parishes based on their level of damage. Parishes will select from a menu of options and decide how they will spend the funds.

Anticipated areas of funding include housing and infrastructure repair, hurricane protection and coastal restoration, agriculture and fisheries recovery and economic development.

Preliminary damage estimates from Gustav and Ike in Louisiana show:

•     Approximately 12,000 homes flooded;

•     Agricultural losses total approximately $750 million;

•     Infrastructure damages total more than $1 billion;

•     Homes suffering some level of damage total 150,000 to 300,000;

•     K-12 and secondary educational facilities received $100-$150 million in damages; and

•     Business losses total approximately $2.5-$5 billion.

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