Louisiana Governor Signs GOP’s $300M Small Business Aid Plan

The Democratic governor John Bel Edwards signed the Republican lawmakers’ Thursday move to spend $300 million to assist small businesses to recover from the Covid-19 pandemic.

The money carved out of the federal coronavirus aid allocated to Louisiana by Congress to respond to Covid-19 disease. Gov. Edwards intends to use about $811 million of the federal aid to reimburse coronavirus related expenses by local government agencies.

The bill by Sen. Mack “Bodi" White was passed during the regular session that ended June 1 having a 73-25 vote divvied the money differently. $300 million on grants to small businesses while $511 million reimbursed to the municipal government for their coronavirus spending. Gov. Edwards signed the measure into law on June 14, giving Republican Treasurer John Schroder the task to manage the program.

Gov. Edwards however vetoed a separate bill by Republican Rep. Mark Wright that would have offered a new payroll rebate to businesses affected by the virus. Even though the bill received overwhelming support from both House and Senate, financial analyses concluded the bill could have cost millions to the state as well as drain the treasury.

The governor cited the payroll subsidy wouldn't have prioritized higher-paying jobs and instead would allow qualification for businesses creating new minimum-wage jobs. According to the governor, the incentive is contrary to the sentiment of the people of Louisiana that the workforce should be able to earn a true living wage. He stated that Louisiana should be wary amid Covid-19 economic uncertainties and avoid creating such programs with sizeable price tags.

Treasurer John Schroder had started seeking proposals from contractors interested in running the program even before the bill was signed and is expected to submit a plan to the lawmakers on how to distribute the grants.

To be eligible businesses have to meet the following requirements:

  • Business to be located in Louisiana
  • The business had no more than 50 full-time workers as of March 1
  • The business is not a subsidiary or is owned by a larger company with more than 50 full-time employees
  • Evidence of interruption in operations due to Covid-19

Minority-owned, women-owned, and veteran-owned businesses will receive an assistance of $40 million from the grants.  Treasurer Schroder will use up to $15 million to administer the program. Businesses that did not receive any federal aid through the Paycheck Protection Program, the U.S. Small Business Administration disaster loan or the business interruption insurance money will first be considered for the first 21 days.

The Edwards administration has plans to disburse first payments in July and every business should comply with the federal guidelines requiring the grants be used for only virus-related expenses.