Gov. Edwards requests $175M unspent Main Street Recovery funds to be reallocated

Money would go to the unemployment trust fund, local governments, and businesses closed during Phases 2 and 3
COVID economic hardships across New Orleans
COVID economic hardships across New Orleans(Wvue)
Published: Sep. 25, 2020 at 11:03 AM CDT
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BATON ROUGE, La. (WAFB) - On Friday, Governor John Bel Edwards wrote a letter to the Senate President and Speaker of the House, requesting that lawmakers reallocate $175 million in money unspent in the Main Street Recovery Grant Program.

The proposal will move $75 million to the state’s unemployment trust fund, $75 million to local governments “most impacted” by the COVID-19 pandemic, and $25 million to grants for businesses forced to close during Phases 2 and 3 of the state’s coronavirus response, such as bars.

At the beginning of September, about $20 million from the program had been awarded to small businesses across the state.

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“One of the most important things the Legislature can do in this upcoming session is to fix the Main Street program and to re-allocate the CARES Act funding to where it is needed,” Gov. Edwards wrote. “While this reallocation will not meet all of the needs that we have for local governments and the Unemployment Trust Fund, it will go a long way towards providing for stability in the local governments most affected by COVID-19 and helping to prevent crippling tax increases on businesses because of the likely insolvency of the trust fund.”

The governor also amended his Public Health Emergency to suspend the solvency tax levied on employers under law when the Unemployment Trust Fund reaches a certain level. The solvency tax will not be imposed.

More: LWC says overpayment notices sent to nearly 7,600 unemployed residents was a ‘technical issue’

Prior to the virus outbreak, Louisiana had the 17th healthiest trust fund in the country, with a balance of over $1 billion. Currently, Louisiana’s trust fund balance is just below $50 million.

More: Louisiana begins the process to borrow money as unemployment trust fund runs low

  • Click here to read the letter to the Senate President and the Speaker of the House.
  • Click here to read the proclamation suspending the solvency tax.

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