Feds OK Mississippi's Katrina grant diversion

Mike Stuckey Senior news editor • Profile • E-mail

While thousands of Mississippians who lost their homes to Hurricane Katrina remain in FEMA trailers, the federal government on Friday approved a state plan to spend $600 million in grants earmarked for housing on a major expansion of the state-owned port — a project that could eventually include casino and resort facilities.

Despite strong objections from housing activists and two powerful congressional Democrats, U.S. Department of Housing and Urban Development Secretary Alphonso Jackson on Friday sent Mississippi Gov. Haley Barbour a letter approving the diversion.

Jackson's letter did express reservations about Mississippi's plans, saying affordable housing in coastal Mississippi is a "more pressing need" than the port expansion and urging Barbour to make housing a priority for the hurricane zone. But the HUD secretary said "congressional language" gave him little discretion to block the switch.

Opponents of the move see it as a prime example of Barbour, Mississippi’s Republican lobbyist-turned-governor, favoring rich and powerful interests over the region’s less fortunate.

“It’s just insanity, true insanity,” Sister Martha Milner, a Catholic nun and longtime housing advocate, said before Jackson's approval. Milner also is a board member of the Steps Coalition, the loudest voice on the Gulf Coast against the diversion of the funds.

Supporters see the money switch as sound economic policy that will help the port capture additional business and provide a bonanza of high-paying jobs.

“In order to remain a viable port, we have to do a good job with this repair and redevelopment,” said Gulfport Mayor Brent Warr.

The money in question is part of $5.5 billion in HUD Community Development Block Grants (CDBG) that Congress authorized for Mississippi after Hurricane Katrina struck on Aug. 29, 2005. Administered by the  Mississippi Development Authority, about $3.4 billion was allocated to replace and repair some of the nearly 170,000 owner-occupied homes destroyed or damaged by the storm. Another $600 million was set aside for programs to replace public housing, help small landlords fix their units and foster construction of new low- and moderate-income housing.

When it became clear that homeowners, who had to meet specific criteria on damage and  insurance, would not tap all of the grant money,  Barbour instructed the state development agency to seek a waiver from HUD to redirect $600 million for work on the port.

Mississippi, with the highest poverty rate of any state by several measures, already had won HUD waivers of rules that require the funds to benefit low- and moderate-income residents.  Critics see the waivers as a product of the unparalleled influence with the Bush administration enjoyed by Barbour, a former Reagan White House political director, Republican National Committee chairman and legendary fixer who continues to receive checks from the Washington lobbying shop that still bears his name.

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