State lawmakers move to limit overhead in new rental aid program

Louisiana legislators voted Friday to cap administrative costs for spending $74 million in federal money meant to help struggling renters and landlords.
Sen. Bodi White, the Republican chair of the Louisiana Legislature’s joint House and Senate budget committee, described the limit as the first step to getting a handle on the costs of the program.
The joint budget committee, made up of members of the state House and Senate, agreed to limit costs to 7.2%. Tim Barfield with CSRS, the state’s primary contractor for the program, said his firm could do the work at that price.
Louisiana’s total allocation, counting direct federal payments to seven parishes, is about $308 million. White said legislative leaders will appoint a panel to provide oversight for the program, adding that additional money for the same purpose might be available later.
Legislators expressed concerns at last month’s meeting that administrative costs might rise as high as 10%, which is the federal government’s limit. Lawmakers pointed out a recent $275 million state grant program for small businesses was capped at 5% for administrative costs and said they wanted to limit the new program’s overhead to that level.
The federal program, however, is more difficult to administer than the state relief program, officials said. For example, both renters and landlords must provide documentation, which means the program is dealing with two applicants for each grant rather than one as in the state program.
The cap on the first round of state spending represents a compromise to make sure the program gets started while alleviating concerns about spending money that could help renters and landlords on overhead, White said.
In other discussions Friday, Renita Ward Williams with the Louisiana Workforce Commission said the state’s unemployment fund again had been tapped out after a recent state infusion of money, forcing state officials to resume borrowing money from the federal government to pay legally required benefits. Officials have borrowed a little over $140 million so far, she said.
Gov. John Bel Edwards and several legislative leaders have said they want to dedicate some of the state’s share of the new federal stimulus package to shore up the fund, but some advocates for low- and middle-income residents argue there are better immediate uses for the money.