Louisiana's grant program for rebuilding hurricane-damaged homes has a projected $3 billion shortfall because the state is giving money to thousands of homeowners who weren't supposed to be eligible, the White House's hurricane recovery czar testified Thursday.
Donald Powell, federal coordinator for Gulf Coast rebuilding, told members of a Senate subcommittee in Washington that the federally funded grants only were intended to pay for flood damage from hurricanes Katrina and Rita in 2005.
However, unlike other states affected by the 2005 storms, Louisiana's "Road Home" grant program is projected to award about $2.7 billion to more than 43,000 applicants whose homes were damaged by the hurricanes' wind and didn't have any flood damage. Around 88,702 residents whose homes were damaged by flood water also are eligible for grants, Powell said.
"We were always very clear that the federal government would not fund state housing programs to cover wind damage," Powell testified before the Disaster Recovery Subcommittee of the Senate Homeland Security and Governmental Affairs Committee.
Sen. Mary Landrieu, D-La., pressed Powell and Louisiana Recovery Authority executive director Andy Kopplin on why the program has a projected $3 billion budget shortfall.
Kopplin said the Road Home program was designed to aid any resident whose home sustained major damage, whether wind or water was to blame.
"When the president said he would do what it takes and stay as long as it takes, he didn't say except if you had wind damage," Kopplin said.
Louisiana's Road Home application, which the federal government approved in June 2006, included a statement that grant applicants "deserve a fair and independent estimate of projected damages from the storm, regardless of the cause of damage," Kopplin said.
"That's been our policy since the beginning," he said. "We did not want to discriminate between the type of damage homeowners who were hit by Katrina or hit by Rita suffered after the storm."
Kopplin blamed the program's projected budget shortfall on inaccurate data provided by the Federal Emergency Management Agency. He said FEMA underestimated both the number of homeowners who could be eligible for grants as well as the severity of damage to homes.
Powell offered a very different explanation for the anticipated shortfall. In February 2006, he said, federal and state officials "mutually agreed" to fund grants for about 106,000 homeowners who had flood damage. With those homeowners getting an average grant of $72,000, the program was expected to cost a total of $7.6 billion, he added.
"This program, which prioritized the most flooded, devastated areas, was our consensus," he said.
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