The St. Tammany Parish School Board got some welcome news from Washington, D.C., just ahead of Christmas: Its $67.8 million community disaster loan has been canceled, removing the need for the board to repay money that helped rebuild schools damaged or destroyed by Hurricane Katrina.
The school system’s debt is the largest in St. Tammany to be canceled. St. Tammany Parish government had a $14.5 million loan forgiven last month, and the parish Sheriff’s Office had a $9.9 million loan canceled.
School Superintendent Trey Folse said in a written statement the loan forgiveness will have “a tremendous financial impact’’ on the well-being of the school system and its students.
The debts canceled in St. Tammany followed $35.6 million in loans that were canceled for nine other Louisiana bodies in August and a $7.2 million loan forgiveness for the Jefferson Parish Sheriff’s Office that was announced in September.
U.S. Sen. Mary Landrieu, D-La., who announced the cancellation of the school system’s loan Monday, has been driving efforts to erase the debts.
Congress eliminated the possibility of forgiveness for disaster loans in 2005, just after hurricanes Katrina and Rita, but two years later, Landrieu authored a provision to restore the possibility of loan forgiveness, allowing the cancellation of $602 million in loans.
The formula for loan forgiveness still presented problems, however, because communities had to show three consecutive years of financial losses after a disaster. Places like St. Tammany and Jefferson parishes, which saw sales taxes spike because of post-storm spending, were penalized under what Landrieu called a flawed formula.
This year, she succeeded in getting language inserted into the federal government’s continuing appropriations resolution to change the formula that had left entities on the hook for loans. That language allowed the cancellation of $211 million in community disaster loans, Landrieu’s office said Monday.
“With this fiscal threat finally and fully removed, the School Board can truly begin a new year and invest its resources into providing the parish’s children a high quality education,’’ Landrieu said in a prepared statement.