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Betty Suhre of the Tangipahoa Democrats and Progressives protests in front of U.S. Sen. John KennedyÕs Mandeville office in the St. Tammany Parish Administrative Complex Thursday, July 30, 2020, to urge him to support an extension of the $600 federal unemployment insurance, which expires Friday. The federal benefit is a supplement to state benefits for more than 465,000 unemployed workers in the state. If it is not renewed, the stateÕs maximum unemployment insurance will shrink from $847 per week to $247 per week. The federal unemployment payment is expiring as the unemployment rolls swell during the global coronavirus pandemic. The protest was coordinated with Step Up Louisiana and was co-sponsored by the Progressive Northshore Democrats and the Tangipahoa Democrats and Progressives.

Igniting controversy, Gov. John Bel Edwards on Friday asked legislative leaders to move what he called $175 million in unspent dollars for small businesses to help shore up Louisiana's dwindling unemployment fund and for local governments. 

"While this allocation will not meet all the needs that we have for local governments and the Unemployment Trust Fund, it will go a long way towards providing for stability in the local governments most affected by COVID-19 and helping to prevent crippling tax increases on businesses because of the likely insolvency of the trust fund," Edwards said in a letter to Senate President Page Cortez, R-Lafayette and House Speaker Clay Schexnayder, R-Gonzales.

The fund that finances weekly unemployment benefits has shrunk from more than $1 billion to $49.4 million, the governor said.

It has been under huge pressure because of skyrocketing jobless claims triggered by the coronavirus pandemic.

Edwards wants to use $75 million of what he says is $175 million in unused federal dollars in the Main Street Recovery Grant Program for the unemployment trust fund when the special session begins Monday.

The program is overseen by state Treasurer John Schroder, a Republican who has clashed with Democrat Edwards on a wide range of issues.

Schroder, addressing a state panel Friday morning, said he has already awarded $72 million of the $275 million authorized, has 37,000 applications and has obligated $255 million in all.

"I will use every penny of it," said Schroder, a former House member.

Schroder also said if he sent a similar, ill-advised letter "the governor would go nuts. I am aggravated by it."

The Main Street program was pushed by GOP lawmakers and approved during the 2020 regular session. It allows small businesses to apply for up to $15,000 in grants if they meet a wide range of qualifications, including having suffered an "interruption of business" because of the pandemic.

Schroder said earlier this year that only 70,000 of 457,000 small firms had landed federal aid.

But Edwards told legislative leaders the effort has not lived up to expectations. The governor said only $58.4 million of the $275 million has been obligated.

"Even with the massive and expensive public relations campaign by the Treasurer to advertise this program (and his office), Main Street is simply not working," according to the governor's letter.

"This was not unexpected and it was the reason why I was vocal in my objection to the way this program was created and funded," Edwards told Cortez and Schexnayder.

Schroder said average grants have risen from just under $10,000 each to about $12,500 and that he was never contacted by aides to the governor before Edwards proposed reallocating $175 million.

"I find it odd that the administration would go so far as to send a letter to you (legislative leaders) without talking to the treasurer," he said.

Later in the day Matthew Block, executive counsel for Edwards, said the governor's request to lawmakers stemmed from figures taken from the state treasurer's website, which he said were changed Friday.

"I guess the governor would like a lot more transparency about this program," Block said. "If the money has truly been obligated and is due to people who have valid claims then we should have an open and transparent discussion about that."

Lawmakers initially allocated $300 million for the program.

They later removed $25 million to help finance $250 payments to front-line workers who stayed on the job during the early stages of the pandemic.

The unemployment issue is one of the key topics when the Legislature begins a special session Monday at 6 p.m. The gathering can last up to 30 days.

Edwards wants to use another $75 million for local governments most affected by the virus and $25 million in grants for businesses closed during Phase 2 and Phase 3 of restrictions on businesses, restaurants and bars.

The governor said he is also using his executive authority to prevent any imposition of taxes on businesses to help shore up the unemployment fund, one of the options that has been discussed. 

Email Will Sentell at wsentell@theadvocate.com.