In the News: With $600 federal unemployment gone, New Orleans area aid programs brace for flood of those in need

Jessica Williams, The New Orleans Advocate • July 28, 2020

For more than three months, an $18 billion federal unemployment program has softened the crushing blow the coronavirus has dealt to New Orleans’ regional economy, providing a cushion that has helped residents pay their rent, keep their lights on and feed their children.

But that program more or less expired on Saturday. Though a deal is pending in Congress to revive it in some form, the $600 weekly check the government has written for residents since April could be slashed, and any cash that is approved could take weeks to show up in people’s bank accounts.

That’s caused some consternation among the public agencies and charity groups that have bankrolled local relief programs with limited resources, and that expect to have to turn away even more people in the coming weeks than they already have.

“We have been leaning in to raise the money and get it out the door as quickly as we can,” Greater New Orleans Foundation CEO Andy Kopplin said. “But it’s impossible for philanthropy to close the massive gap that would come from the expiration of federal unemployment assistance.”

The philanthropic group has raised more than $3 million for low-income families and the nonprofits who serve them since the pandemic began, but Kopplin said that’s a drop in the bucket compared to the need.

There were 111,056 jobless residents across seven New Orleans area parishes as of July 18, according to the state’s unemployment rolls. New Orleans and Jefferson, the two largest parishes in the region, saw the highest numbers of unemployed workers.

Since mid-April, those who lost income due to coronavirus have received up to a maximum $247 state weekly benefit, one of the lowest jobless payouts in the nation, plus the $600 weekly federal benefit now in question. Republicans in Congress, angry that many Americans have been making more on unemployment than they were while working, are expected to announce a plan in the coming days that significantly drops that amount.

Democrats have pushed to hold it steady, arguing that staying home is increasingly the safest option and that most of the money gets pumped into the economy to the benefit of the businesses that are open. The negotiations will continue into this week, even though the current funding, officially set to end on July 31, effectively ended Saturday, due to the way states handle unemployment payments.

The payout Congress eventually approves is likely to be stalled by slow processing times in state unemployment offices, as was the case for the first round of federal aid, said University of Chicago economist Joseph Vavra, who has studied the unemployment boost’s impact on the economy. That could cause people’s incomes to drop temporarily.

“First, the state will start programming their computers to take away the latest benefit, and then whenever new legislation is passed — if it is passed — they will have to reprogram their computers to do that … The longer these delays take, the more likely it will negatively impact families,” Vavra said.

That worries Second Harvest Food Bank CEO Natalie Jayroe, whose organization typically serves 2.5 million meals to south Louisiana every month, but has served double that amount since coronavirus restrictions and job losses began.

The loss of the federal benefit, coupled with strains on Second Harvest’s food supply due to shifts in federal regulations and funding declines, could quickly overwhelm its operation and force it to ramp down distributions just when people need them most, Jayroe said.

“Just as people get this cut, we are going to have less food in our warehouse,” she said.

At least one local meal-assistance program could have some additional capacity once people have less in their wallets to spend. An initiative Mayor LaToya Cantrell’s administration launched in late June to feed up to 30,000 residents a day had seen only 7,500 sign up by early last week.

Meant to feed needy residents and stimulate a restaurant industry that has seen revenue decline amid the restrictions, the program has restaurants waiting to provide meals for its participants, said Chef’s Brigade founder Troy Gilbert, who is part of the group that manages the program. Anyone who becomes newly in need of food after benefit checks dry up should sign up, Cantrell spokeswoman LaTonya Norton added.

Meanwhile the state’s rental assistance program, which tapped out before the federal benefit expired, cannot bear the brunt of newly income-deprived people without more money, the agency that runs that program and the advocates who have criticized it agreed last week. They disagreed on where that cash should come from.

“We’re very concerned,” Louisiana Housing Corp. Executive Director Keith Cunningham said Friday. “I think the question that you are asking me is, ‘How can the state of Louisiana get more resources?’ The answer to that question is, Congress has to allocate those resources.”

Cunningham’s agency committed $24 million to help 10,000 renters, but had to shut its program down last week when 40,000 people applied. Advocates have said that closer to $250 million is actually needed, and that the state can pull a good chunk of that from other COVID-19 funds it has received. But Gov. John Bel Edwards has said the state is looking to get more money from Congress specifically for the purpose of rental housing in the coming months.

New Orleans opened applications for its own rental assistance program on Friday, though city officials warned residents that cash for it “is extremely limited, and will not meet the scale of demand that we know exists.”

Anticipating cuts to federal unemployment, more New Orleans area residents have begun to turn to local aid programs for relief, often with mixed results.

Before the coronavirus ground his industry to a halt, Edward Bowdon was part of a team of emergency responders who airlifted injured offshore workers from oil rigs in the Gulf of Mexico and whisked them away for treatment.

Since COVID-19, the 55-year-old has relied on unemployment and other aid to stay afloat, and he was ecstatic when he was approved for a program Entergy New Orleans and the New Orleans City Council created to cover people’s power bills over a four-month period.

But while he was told in early July the credit would appear on the bill he received a few days ago, it did not. An Entergy spokeswoman chalked it up to a processing delay and said the credit should show up next month.

Bowdon’s benefits expired this week.

“This is really the bill where you could use some relief,” he said. “To jump through the hoops and fill out the paperwork, and go through the process of getting approved, and then not get the credit, it’s frustrating.”

From “With $600 federal unemployment gone, New Orleans area aid programs brace for flood of those in need”, July 26, 2020, Jessica Williams, The Advocate. Read the original here.