Miss. wants to divert more hurricane funds

Mike Stuckey Senior news editor • Profile • E-mail

Two weeks after federal officials allowed Mississippi Gov. Haley Barbour to divert $600 million in post-Katrina housing funds to a massive expansion of the state’s port, the governor is seeking to shift another $25 million in hurricane recovery money to a highway improvement project far from the storm zone, which would chiefly benefit a new Toyota plant being built in the area.

Barbour’s  money-moving efforts, which have been criticized by Democrats in Congress and the state Legislature, come as other officials seek additional funding for what they say are unmet needs left by the devastating August 2005 hurricane.

The U.S. Department of Housing and Urban Development announced last week that it has asked Congress for another $39 million in the 2009 federal budget for permanent housing aid for elderly and disabled renters displaced by Katrina along the Gulf Coast.

And the state’s new U.S. senator, Roger Wicker, said upon taking the post last month that obtaining additional federal disaster relief funding would be his first order of business.

Critics say Barbour and other state officials have used much of the billions of dollars in federal aid that has poured into Mississippi after Katrina to benefit the business community and address infrastructure issues unrelated to the killer hurricane.

Critics say poor getting short shrift
Meantime, they contend, thousands of low-income residents, many of whom still live in FEMA travel trailers more than 2½ years after the storm, have received little help rebuilding their lives. And the state’s Medicaid program, which has an ironic link to the $25 million sought by Barbour for the highway project, is facing  huge deficits that could force drastic cutbacks in the poorest state in the union.

“We still have a lot of needs on the Gulf Coast and it just doesn’t make sense to prioritize a four-lane highway around a Toyota plant,” state Sen. David Baria told msnbc.com. Baria, from Bay St. Louis in the heart of the hurricane zone, was among six Democratic state legislators in Mississippi who signed a statement protesting the road funding plan proposed by Barbour, a Republican.

Barbour’s office says the funding in question is state money that Mississippi can spend as it likes, as long as state lawmakers approve, and the Toyota plant, 300 miles away from the Gulf Coast near Tupelo, aids the state’s recovery from Katrina.

“Not only does it serve our state's economic development strategy of seeking large-scale automotive manufacturing plants and suppliers, it creates thousands more good-paying, higher-skilled jobs than exist today,” press secretary Pete Smith said in an e-mail response to questions from msnbc.com. “Creating new jobs in Mississippi does help the cause of recovery because working people pay taxes to support state initiatives.”

The money the governor wants to use for the highway project is in the “state hurricane reserve fund” courtesy of post-Katrina federal forgiveness of some state costs for Medicaid, the joint state-federal health-insurance program for the poor.

Feds picked up state's Medicare costs
In addition to billions of dollars of aid that the federal government sent to Mississippi after the hurricane, it assumed the state’s share of Medicaid costs for the first half of 2006. The state used  a big part of what it would have spent on Medicaid, about $368 million, to create the hurricane reserve fund, anticipating that it would need the money to match other federal hurricane relief dollars. But the matching requirement was later waived and about $270 million remains in the fund.

“Yes, it was originally intended as match money for Medicaid, and, possibly, other things,” said Smith, Barbour’s spokesman.

Reilly Morse, an attorney with the Mississippi Center for Justice, a public interest law firm that has been a frequent critic of post-Katrina spending priorities, was incredulous. "Taking money from Medicaid and putting it into a road? Is there no low-income need so sacred that Gov. Barbour won’t rob it?"

The governor’s office also used economic arguments in defending its plan to shift $600 million in federal post-Katrina housing funds to expand state shipping facilities at Gulfport. In a Jan. 25 letter approving the switch, HUD Secretary Alphonso Jackson said he had “little discretion” to block the transfer, even though affordable housing in coastal Mississippi was a "more pressing need" than the port expansion.

So pressing that as the $600 million in housing funds flows to the port, Jackson’s agency is now seeking another $39 million from Congress for permanent housing aid for elderly and disabled renters displaced by Katrina.

Housing programs ‘apples and oranges’
HUD spokesman Brian Sullivan called the two housing programs “apples and oranges,” saying in an e-mail that “one funds the brick and mortar stuff, building the capacity to house people, repair/replace infrastructure, etc. … (and) the other provides ongoing assistance to subsidize rents.”

The port diversion already has drawn the attention of a pair of powerful House Democrats – Reps. Barney Frank and Maxine Waters -- who have vowed to probe how federal hurricane funds are being spent in Mississippi.

And Barbour is now facing the ire of state lawmakers from the Gulf Coast who believe the money sought for the road project would be better spent on hurricane recovery or the Medicaid budget gap.

Sen. Debbie Dawkins of the coastal town of Pass Christian, which was leveled by the storm, was another of the six Democrats who signed the statement protesting Barbour’s road-funding plan.

She said she's tired of hearing various pools of money called "apples and oranges" and rejected Barbour’s argument that a Medicaid shortfall shouldn't be fixed with a one-time funding source.

"It's green!" Dawkins exclaimed during a telephone interview with msnbc.com. “When we’re in a crisis with Medicaid, we use whatever money we can get. All states do!”

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