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PAR Says Turf Battle Threatens Planning Integrity

The Louisiana Recovery Authority (LRA) and the Joint Legislative Committee on the Budget recently fought a turf battle over funding decisions, and the wrong side won. The full Legislature now has a final chance to salvage the integrity of the planning process the state has followed thus far in allocating billions in federal recovery aid. Legislators will vote via mail-in ballot whether to pass the plan as amended in committee to approve the full $300 million request to fund the rebuilding of charity hospital in New Orleans. Rubber-stamp approval would be irresponsible.

The spending plan as recommended by the LRA was to approve the spending of only $74 million of a $300 million request to fund the rebuilding of the charity hospital in New Orleans. The remaining $226 million was to be approved in a later action plan following LSU’s submittal and the Board’s review of business plans for the hospital, which, at a minimum, would estimate the appropriate size of the new facility.

The LRA appropriately tried to put the brakes on spending the full amount. However, behind-the-scenes wrangling led to last Friday’s showdown, which resulted in the Joint Budget Committee amending the spending plan in a precedent-setting move. The controversy over whether it has the authority to amend or merely accept or reject the plans until now has been avoided as the LRA and Legislature agreed on broad spending guidelines for nearly all of the $10.4 billion in available Community Development Block Grant (CDBG) funding.

This is a prime example of the legislative “horse-trading and backroom deal-making” that PAR warned against in a commentary recommending the statutory establishment of the LRA. PAR continues to urge that the Legislature’s involvement in disaster aid spending be limited to acceptance or rejection of plans, and that it not be given the power of amendment. This appropriate limit was requested by Congress when it appropriated the CDBG disaster aid. The idea of funneling aid through the LRA, which is modeled after the Lower Manhattan Development Corporation, was to alleviate the risk that parochial concerns would override sound redevelopment goals.

The partial funding recommended by the LRA Board was to pay for land acquisition and architectural fees. To approve the full amount would have been a dereliction of the Board’s duty to develop spending plans that forward the state’s recovery. It would have allowed the status quo to reign in this key issue of redeveloping the health care infrastructure in the New Orleans region. Instead, the Joint Budget Committee chose to do just that. If the full amount is approved, it would leave further scrutiny of plans for the replacement hospital to the capital outlay process, which is limited to review of construction feasibility and will likely fail to consider health care reform issues.

The LRA had expressed a strong willingness to fund the remaining amount in a future spending plan, so the end result would likely be the same whether the full funding is granted now or later. But, should LSU submit hospital plans that do not support the dismantling of the two-tiered health care system in the region, there would be opportunity to withhold this piece of disaster aid.

That opportunity should not be forfeited for the sake of a turf battle. Any day now when the mail-in ballots are sent, the full Legislature will have the opportunity to change this unfortunate course in the state’s recovery. The amended action plan should be rejected. Moreover, during the next legislative session, the statutes outlining the LRA’s role in spending recovery aid should be rewritten to expressly forbid legislative amendments to spending plans.

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