Louisiana small businesses can start applying for up to $15,000 grants each on July 28, Treasurer John Schroder announced Wednesday, after he selected three firms to run the $275 million program set up by Republican lawmakers.
Schroder said at a press conference he selected accounting firm Postlewaite & Netterville to administer the program, New Orleans-based marketing firm MLCWorks to promote it and OpenGov to handle the online portal.
The program was pushed by a task force created by legislative leaders to come up with ideas for coronavirus recovery in the legislative sessions that ended Tuesday. Jason DeCuir, a lobbyist who chairs that task force, and former state representative and Lafayette mayor-president Joel Robideaux, a member of the task force, bid on the contract to run the program, prompting calls from at least one top Republican lawmakers to withdraw.
Instead, Schroder’s office will spend $7.16 million of the federal aid on contracts with Postlewaite & Netterville, MLCWorks and OpenGov. P&N’s contract is up to $5.8 million, MLCWorks will get up to $1.2 million including media buys and OpenGov will get up to $158,000.
P&N will vet applications from eligible businesses starting July 28, and businesses can go to latreasury.com to sign up for updates. Schroder was required by law to announce the program’s start date by Wednesday.
“This is first-come, first-served,” Schroder said. “$275 (million) is not going to go very far.”
To qualify, a business must be based in Louisiana, have suffered an “interruption of business,” be owned at least 50% by Louisiana residents, have filed taxes in 2018, 2019 or will file in 2020, have no more than 50 full-time employees as of March 1, have customers or employees visit a physical location, not be part of a larger business, not exist for the purpose of advancing political activity or lobbying and not derive income from passive investments without “active participation in business operations.”
Schroder said of the more than 457,000 small businesses in Louisiana, only 70,000 received federal aid. In the first 21 days of the Main Street Recovery program, only businesses that did not already receive federal aid or insurance payouts will qualify.
The cap on the grant amount is $15,000, and companies will have to prove they had coronavirus-related expenses that will be spelled out by the time the program begins. But the money does not need to be paid back.
Schroder said demand will likely “far exceed” supply, which is $275 million after lawmakers took $25 million from the initial $300 million pot of money to put toward front-line workers.
“It could be sucked up in the first 21 days,” Schroder said. “We just don’t know.”
Schroder also said his office needed to ensure that it could operate the program without being “handcuffed” if the governor’s emergency declaration expired. That’s why he said he needed an amendment to a budget bill that was made late in the legislative session to exempt him from procurement rules, saying “there’s nothing to it.”
Forty million dollars will be set aside for grants for minority-owned, women-owned or veteran-owned businesses in the first sixty days.
Grants will be paid out until Dec. 1 or when the money runs out, whichever is sooner.
Louisiana’s program is one of the key accomplishments of Republican lawmakers in the legislative session that ended June 1. A month-long special session began immediately thereafter.
The state received $1.8 billion in federal coronavirus aid, and the Legislature agreed to use more than $900 million to plug holes in the state budget. That left $811 million that Democratic Gov. John Bel Edwards wanted to send to local governments.
But after Edwards’ administration hinted that local governments likely wouldn’t be able to tap into all the money, Republican lawmakers, backed by the legislative task force, pushed forward a plan to use $300 million of the funds for small business grants, modeled after a similar program in Mississippi.
Now, Louisiana is spending $275 million on the grant program, more than $500 million on local governments and $50 million on front-line workers, though money could be shifted if one of the pots has leftover funds.