Katrina Survivors and Cleanup Workers Wait for Money
Gulf Coast residents who weathered Hurricane Katrina and the immigrants who flooded in to clean up the mess are playing a waiting game, and their patience has run out.
Mississippi and Louisiana residents who lost their homes and businesses are waiting for their insurance checks; workers, many of them illegal immigrants, are still waiting for paychecks after weeks of work.
Meanwhile, the federal government is waiting for $3.7 billion from the state of Louisiana as repayment for its hurricane relief costs. The Federal Emergency Management Agency (FEMA) may be waiting the longest—Gov. Kathleen Blanco says the state can't pay.
"You can't squeeze $3.7 billion out of this state to pay this bill. Period. That would be difficult for us on a good day," Blanco's spokeswoman, Denise Bottcher, told USA TODAY.
Under federal law, state and local governments must pay part of the disaster relief costs, and Congress would have to pass a bill to forgive Louisiana's debt. In this case, the $3.7 billion estimate is about 9 percent of FEMA's projected costs in Louisiana. (Mississippi and Texas have not received FEMA's projected costs yet).
Meanwhile, Blanco cut $431 million in state spending over the weekend to address the estimated $960 million shortfall in state tax revenue created by Hurricanes Katrina and Rita, the Advocate of Baton Rouge reported.
In New Orleans, residents who lost their homes to Katrina have resorted to begging their insurers for money. William Dwyer, for example, told the Associated Press that four weeks after an adjuster inspected his property, he has heard nothing about compensation. "Each time I call they refuse to say anything. They don't return our phone calls. It's been horrible. We lost everything we had."
The future of Dwyer and other hurricane survivors is on hold until they can receive insurance money to rebuild what they lost. The Louisiana Department of Insurance has received 1,367 complaints about insurance companies since the storm.
"What I keep telling everybody is you have to remind yourself you're dealing with the largest natural disaster in American history," said Louisiana Insurance Commissioner Robert Wooley. "It's not going to be pretty and it's not going to be fast."
Some immigrants who were lured to the Gulf Coast with the promise of good money and plenty of work are yet to receive even one paycheck, the AP reported. Armando Ojeda told a reporter that he paid $2,400 to be smuggled across the border from Mexico to work in Gulfport, Miss., where he still awaits $600 he said he earned for eight long days of hurricane cleanup. The subcontractor said payments can be held up somewhere along a long chain of subcontractors.
Failing to pay workers is not considered a crime under Mississippi law, and the state Department of Employment Security passes wage claims along to the U.S. Department of Labor. The Mississippi Immigrants Rights Alliance said it had prepared complaints on behalf of more than 150 workers who are owed more than $100,000 by five contractors.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.