WBRZ News

Many federal Katrina loans won't have to be repaid

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Posted: Aug 19, 2010 2:22 PM
Updated: Aug 19, 2010 2:48 PM
Source: Associated Press

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Topics: federal, loan, katrina, hurricane, debt, forgiveness, credit, wbrz

About 61 percent of the $822 million in federal funds borrowed by storm-wrecked communities after hurricanes Katrina and Rita won't have to be repaid. But that leaves more than $296 million owed to the federal government.

Financially struggling sheriffs, school boards, parish councils and other local government agencies received federal disaster loans to help cover the costs of regular operations after the storms wiped out much of their income.

Congress agreed to "forgive" the loans if agencies met certain criteria involving operating deficits and revenue losses.

The State Bond Commission received a report Thursday on which agencies won't have to repay the loan money. About $501 million has been forgiven.

The state is haggling with federal officials over the rest, arguing that more of the borrowing shouldn't have to be repaid.

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