October 3, 2005

Louisiana seeks US funds for local payrolls

By Hilary Burke

BATON ROUGE, Louisiana (Reuters) - Louisiana Gov. Kathleen
Blanco urged President George W. Bush and Congress on Monday to
allow federal funding of city and county payrolls after two
lethal hurricanes wiped out many local tax bases.

"Our local governments are recovering, but many are on the
verge of financial collapse. I'm asking the federal government
to help pay the regular-time salaries of these essential public
employees during this emergency period," Blanco told reporters.

As southern Louisiana rebuilds from Hurricanes Katrina and
Rita, authorities are seeking to ensure that key local services
such as police are in place before displaced residents return
to their homes.

Federal regulations prohibit the Federal Emergency
Management Agency (FEMA) from funding anything besides overtime
pay for local workers. Blanco pleaded for administrative or
congressional help to repeal this rule.

The governor said she would meet with local officials later
on Monday to discuss how much money might be needed. She said
FEMA would ultimately decide on a case-by-case basis both the
amount of cash and the time frame.

"FEMA has been appropriated some $60 billion, and as far as
we know there's still about $40 billion that's not specifically
dedicated to certain expenditures," Blanco said. "FEMA could be
allowed to use some of that money to float these local
governments in the short term."

FEMA has sent a letter to the governor explaining the
agency's position, and Congress would have to act to change the
regulations, FEMA spokesman Marty Bahamonde said.

White House spokesman Trent Duffy said the request "will be
thoroughly and promptly reviewed by the administration."


The death toll in Louisiana from the Hurricane Katrina rose
to 964 on Monday as the state said its official search and
rescue operations had come to a halt.

The body count, at nearly 1,200 for all the states hit by
the hurricane, was expected to continue to climb as crews
cleared away debris and wreckage from collapsed buildings
across the region.

In St. Bernard Parish, a county bordering New Orleans that
Hurricane Katrina leveled in late August and Rita reflooded in
late September, officials will be unable to pay workers for
more than 30 days.

"We're not asking for any help as a welfare situation,
we're asking for some help to survive," said parish President
Henry Rodriguez Jr. He estimated the parish would need three
years' worth of revenue in aid.

St. Bernard's budget is normally $57 million.

The mayor of Vinton, Louisiana, said the town's entire
commercial district was wiped out by Hurricane Rita, which hit
the Texas-Louisiana border.

New Orleans has started laying off up to 3,000 nonessential
city workers, or 40 percent of the total payroll, although
Mayor Ray Nagin has said the cuts were not completed and he
would continue to seek alternatives.

Nagin has pushed for the speedy repopulation of the city,
and has said as many as 300,000 people, out of a pre-storm
population of 455,000, could return by the end of this week.

Two weeks ago, layoffs at the Plaquemines Parish Sheriff's
Department were narrowly avoided after the state rushed through
$10 million in emergency funding, the governor's office said.

Louisiana's requests may meet skepticism in Washington,
where many fiscally conservative politicians are wary of
Louisiana's reputation for corruption and of spending that
could derail efforts to reduce the federal budget deficit.

Those fears have been fanned by the request from Louisiana
Sens. Mary Landrieu and David Vitter for a massive $250 billion
in federal aid to rebuild the state. Blanco has said she
supported that request.

"I think that overreaching may hurt the governor's hand,"
said Robert Hogan, associate professor of political science at
Louisiana State University in Baton Rouge.

(Additional reporting by Matt Daily in New Orleans and Adam
Entous in Washington)