FEMA has sent LA a bill for "its share of hurricane relief". Governor Kathleen Blanco says she can't pay it.
...Staffers for the governor "about fell over" Wednesday night when they received the Federal Emergency Management Agency's estimate of the state's costs for hurricanes Katrina and Rita, said Mark Merritt, a consultant working for Blanco.
FEMA projects that it will spend a total of $41.4 billion in Louisiana, about $9,000 per resident. Federal law requires state and local governments to pay a portion of disaster relief costs. That share can be as much as 25%. The $3.7 billion estimate is roughly 9% of FEMA's projected costs in Louisiana.
The $3.7 billion represents just under half of the $8 billion the state spends per year and comes as the extensive flooding around New Orleans has severely undercut tax revenue. The state is in the midst of heavy cost-cutting to whittle down a projected $1 billion shortfall...
Merritt is a former FEMA official who now works with former FEMA director James Lee Witt, an adviser to Blanco on hurricane recovery. Merritt said the scope of the disaster far exceeded anything envisioned when the relief agency was created. He called the costs "astronomically unprecedented..."
Bush is required to get the money out of the states, but Congress can (and probably will) waive it.