(The Center Square) – Louisiana governments could be in line to receive an estimated $1.803 billion from the federal government to help with expenses related to the COVID-19 outbreak.
On Wednesday afternoon, a federal aid and stimulus package worth at least $2 trillion was being negotiated in the U.S. Senate ahead of a possible Wednesday night vote.
Each state would get at least $1.25 billion, U.S. Sen. John Kennedy said. Additional money would be distributed according to population.
Cities with populations above 500,000 would be eligible for direct aid, he said. In Louisiana, which doesn’t have any cities that large, the local aid would flow through state government, Kennedy said.
“The money will go to the governor, and it can only defray expenses related to the coronavirus,” he said.
Louisiana state government ran a surplus of almost $535 million during the fiscal year that ended June 30, officials say. Before the current health care crisis began, state officials expected to have more revenue than was budgeted for the current year, Gov. John Bel Edwards said Wednesday.
“Obviously, we are eroding that excess, and these expenditures are an issue,” he said. “I’m not going to stand here today and say we are at a deficit because I don’t believe that is the case.”
The federal bill also includes $100 billion for hospitals nationwide according to Kennedy, which Edwards noted would allow the state to spend dollars that otherwise would go to hospitals on other things. Congress already has approved legislation that would increase the federal share of Medicaid spending by 6.2 percent, he added.
Money state government is spending now to address the crisis is eligible for 75 percent reimbursement by FEMA, Edwards said.
Aside from the COVID-19 expenses, Louisiana also is facing low oil prices. Low oil prices lead to less revenue for state government.
"Right now, my biggest concern is this health emergency," not state finances, Edwards said.