BATON ROUGE, La. (WAFB) - Lawmakers created a new fund for small businesses that have been left out of prior coronavirus aid by diverting $300 million away from local governments in the final minutes of the regular legislative session Monday, June 2. The plan is now headed to Governor John Bel Edwards’ desk for final approval.
The money is part of the $1.8 billion CARES Act package Congress sent to Louisiana. Lawmakers are using nearly half to plug the state’s budget holes, and the rest would go to small businesses and local governments.
“We have a plan to try to put Louisiana businesses back to work,” Senate president Page Cortez, R-Lafayette, said. “Ultimately, government cannot survive without a tax base.”
Businesses that have not already received a Paycheck Protection Program loan, an SBA disaster loan, or drawn on a business interruption insurance policy could apply for the ‘Main Street Recovery’ grant through the treasurer’s office. Grants are capped at $15,000 each.
Businesses with less than 51 employees could use the grant to cover coronavirus expenses like cleaning equipment, or to cover revenue losses because of closure, or reduced product demand during the economic shutdown.
Of the $300 million, $40 million is set aside for minority-owned and veteran-owned small businesses.
“If we don’t get businesses back stronger than ever, we’re not going to have a tax base,” Cortez said. “We’re going to be in problems and fiscal cliffs over and over.”
A special economic recovery task force commissioned by the legislature’s Republican leadership hatched the idea. Cortez says grants could be awarded by the end of June.
Edwards would instead send the available federal money to local governments to help them cover Coronavirus costs. Commissioner of Administration Jay Dardenne, Edwards’ budget architect, says local governments probably would not need the entire amount.
But the administration contends that the move is premature because some congressional lawmakers want to give state and local governments more flexibility on how their CARES Act allotments are spent. Municipalities are strapped for cash, facing tax revenue losses and new expenses associated with the COVID-19 fight.
“If (they) are successful and we’ve already gone through all of the CARES Act funding, then none of it will be left for local government to replace revenue,” Edwards said last week.
Edwards could veto the idea during the special legislative session.
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