Edwards lays out his priorities for $1.6B in federal funds

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Gov. John Bel Edwards wants to spend Louisiana’s first $1.6 billion in federal American Rescue Plan money on infrastructure, tourism and unemployment benefits.

The governor's announcement Thursday added more detail to his administration’s previously stated priorities for the first half of the state’s anticipated $3.2 billion allocation. Edwards expects the money and the final federal rules governing its use to be available by May 10.

The Louisiana Legislature will have to approve the final spending plan. Edwards said he has discussed his priorities with legislative leaders and hopes they’re mostly on board, though there could be room for compromise.

Edwards said it was important to guard against putting “everybody’s pet project” in line for ARP money, arguing that dividing up the money into too many pots would dilute lawmakers’ ability to make transformative changes.

Edwards’ priorities for the $1.6 billion are:

Unemployment insurance trust fund, $630 million: Edwards wants to set aside $230 million to pay back money the state borrowed from the federal government to pay unemployment benefits after the state fund was tapped out by the unprecedented COVID-19-related demand. He also wants to dedicate another $400 million to replenish the fund.

Edwards' stated goal is to get the fund balance above $750 million by the end of next year, using future ARP money, if necessary, which would keep employer taxes and worker benefits at their current level under state law. Laws that otherwise would call for higher taxes and lower benefits are suspended and an effort is underway to extend the suspension.

Transportation infrastructure, $400 million: Edwards did not list specific projects. He said his goals are to address “longstanding projects that have been on the books for years,” creating jobs and “chipping away at our $14 billion infrastructure backlog.”

Water and sewer systems, $300 million: Edwards would use $300 million for revolving loan funds dedicated to drinking water and sewage systems. Despite the description, the loans convert into grants once all commitments are met, he said.

A working group involving state agencies and legislators are developing the rules about how the money will be distributed. Edwards said he expects local leaders to contribute some of their ARP money; local governments in Louisiana are expected to receive a total of about $2 billion.

About 20% of the state’s water systems are “under formal enforcement” and most have infrastructure more than 50 years old, officials said. State leaders want to encourage consolidation of smaller systems where possible.

Tourism, $145 million: Edwards wants to set aside $125 million for local tourism bureaus and venues to make up for lost revenue and gear up for what is expected to be a busy travel season. Jill Kidder, president and CEO of the Louisiana Travel Association, said pent-up demand is setting up the “most competitive tourism market in history” and urged residents to invite their friends and family to visit and ask their organizations to plan conventions and events in Louisiana.

The governor also is proposing a $20 million funding boost for the state’s Department of Recreation and Tourism.

Ports, $50 million: Edwards wants to replace revenue the state’s port systems lost during the pandemic. He would like to set up a program similar to how his administration divvied up federal Coronavirus Aid, Relief and Economic Security Act relief dollars for local governments, in which port leaders could detail their losses and draw down money based on how much they lost.

The most notable absence from the list is money for broadband infrastructure, which is explicitly allowed in the ARP and is a shared priority of the administration and the Legislature. The ARP, however, provides for Louisiana a separate $180 million pot for that purpose, which Edwards said provides a good start that could be enhanced with the next round of funding from the ARP or other federal infrastructure plans under discussion.

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