Danielle (Dani) Cutler
$4.5 Billion In Katrina Aid Unspent
When you get fed up with the red tape at your local DMV, consider this: Three-quarters
of the billions in federal money earmarked to replace schools, firehouses and other
public works after the 2005 Gulf Coast hurricanes still haven’t been spent. [USA
Looking closer at the numbers: Of the $4.5 billion that FEMA approved for infrastructure
projects in Louisiana and Mississippi, only $1 billion has been used.
So where’s the rest of it? Waiting in limbo. Much of the funds are sitting in state
accounts waiting to be parceled out to the local officials responsible for the rebuilding
Problems and hold-ups exist on both the federal and the local levels. And, naturally,
officials from both sides are pointing their fingers at each other.
“It’s time for local governments to start making the tough decisions about what they’re
going to build back and start moving forward on the permanent recovery,” said Robert
Josephson, FEMA spokesman.
Meanwhile, state and local officials overseeing the recovery say they are moving as
quickly as they can to get the projects finished. Many require months of planning
and construction, and navigating federal rules has sidetracked hundreds of projects,
said Andy Kopplin, the outgoing head of the Louisiana Recovery Authority.
Additionally, officials on the ground say the biggest roadblock to their recovery
has been FEMA’s cumbersome process that must be endured in order for funds to be spent.
FEMA’s public assistance program gives money to states, which generally use it to
reimburse local governments for projects once they’re complete. That process has created
obstacles for New Orleans and other communities, where local laws say money must be
in place before work can begin. The city has borrowed $460 million to cover upfront
“Very simply, it’s dramatically slowed down the infrastructure reconstruction process.
It slows down the recovery,” Kopplin said. “Are we satisfied with the rate of construction?
Absolutely not. We’d like it to be double that. But the biggest challenge in spending
the money has been FEMA’s process.
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