(The Center Square) – Louisiana’s $275 million grant program to reimburse small businesses for COVID-19-related expenses likely will run out of money before it runs out of applicants, State Treasurer John Schroder said Tuesday.
“Two hundred and seventy five million dollars spread out to 350,000 businesses is not a lot of money,” he said.
The money comes out of $811 million in federal CARES Act pandemic aid. The program mostly will operate on a “first come, first served” basis, with a couple exceptions.
For the first 21 days, only companies that have not received help from the federal government or an insurance company are eligible. Schroder said $40 million will be set aside for the first 60 days for businesses owned by women, minorities and/or veterans.
Grants are reserved for companies with 50 or fewer employees and are capped at $15,000. Schroder, whose office is managing the program with help from outside consultants, said if an applicant is eligible for the full $15,000, they will get it. The Legislative Auditor will verify the expenses, the treasurer said.
The program is for expenses directly related to the pandemic and is not meant to replace lost revenue. Eligible costs could include buying masks and personal protective equipment or expenses incurred to ensure physical distance between customers.
The legislation allows for administrative expenses up to 5 percent of the program’s value, or $13.75 million. Consultants said Tuesday that administration will cost $12.4 million.
During Tuesday’s meeting of the Joint Legislative Committee on the Budget, Schroder pledged to reach out to rural parishes, including business owners who might not have the internet or be savvy about how to apply.
Senate President Page Cortez recommended members not let their legislative assistants fill out the applications for the applicants. Cortez said he doesn’t want legislators to be blamed if someone doesn’t get a grant. He also suggested legislative involvement would violate the separation of power principle, noting that executive agencies such as the treasurer’s office are tasked with executing laws.
The Main Street Recovery program will begin taking applications July 28. More information is available at LouisianaMainStreet.com.
State officials so far have authorized more than $120 million in pandemic reimbursement for local governments and “checks are literally going out today and tomorrow,” Commissioner of Administration Jay Dardenne said, adding that 24 parishes have not yet applied. That money also comes from the federal CARES Act.
Also on Tuesday, the Joint Budget committee agreed to allow leadership to negotiate a salary for new Legislative Fiscal Officer Chris Keaton. The salary is expected to be in the range of $180,000 to $220,000; Cortez plans to look into what other states pay for similar positions, he said.