Haley Barbour Wants to Divert Even More CDBG Katrina Funds from Low-Income Housing

Facing South reports on the latest development in Mississippi's road to non-recovery from Hurricane Katrina.

A Mississippi agency wants to divert $600 million in federal funds from a housing program created to help low-income homeowners who suffered losses in Hurricane Katrina and use it to spruce up the State Port at Gulfport, the Associated Press reports.

The MDA claims that the housing program has more than enough money to meet demand, making the diversion possible. "This funding will be an important part of helping the State Port Authority restore and enhance port infrastructure for economic development initiatives that will create jobs and improve quality of life for the citizens of the Mississippi Gulf Coast," Gov. Haley Barbour said in a recent statement.

The outrageousness of this proposal needs some elaboration.

Facing South has previously noted that of the $16.7 billion dollars of Community Development Block Grant (CDBG) money set aside by Congress for the Gulf Coast "only $1 billion -- just 6 percent -- had been spent, almost all of it in Mississippi" (emphasis added). This and other comparisons of the respective federal funds allocated to hurricane recovery efforts in Louisiana and Mississippi lead well intentioned social justice advocates to buy a false picture, of Mississippi's recovery. The implicit logic seems to be that if Mississippi is getting so much more federal money than Louisiana, then it stands to reason that "recovery 'is well underway' in Biloxi, Gulfport and Pascagoula."

There is a recovery underway in Biloxi and other parts of coastal Mississippi, but it is a recovery for casinos and resorts, not for people and communities.

Standing inside the Beau Rivage Resort and Casino in downtown Biloxi, Mississippi, you'd never guess that you are at the epicenter of a town that lost over 5,000 homes in the flood. In the crowded lobby, guests drift past lush banks of flowers toward the retail promenade, where a store called the "Jewelry Box" displays Rolex watches, gold chains and flashy rings. Inside the gaming rooms, business is booming: Players pack the high stakes poker rooms and the aisles lined by 25 cent slot machines.

Just blocks away, the working class neighborhood of East Biloxi is still a wasteland of bare concrete slabs, where homes were washed entirely off their foundations. On many lots, front steps lead to nowhere. Local activists say that government assistance has been very slow in coming to this community, which was primarily populated by low-income African-Americans and Vietnamese.

Across the Gulf Coast, examples of the uneven recovery are everywhere. In most towns, families and businesses with private resources are rebuilding, while the poor are often still waiting for the government assistance they were promised. Nowhere is this contrast more glaring than in Biloxi, Mississippi....

The Biloxi casinos have made record profits in the past year, as contractors with money to burn spend their evenings at the new Hard Rock Casino, or the deluxe Beau Rivage. But the industry clearly thinks there's still plenty of room in the market. In mid-August, construction workers broke ground on the new Margaritaville casino and resort, a 46-acre complex of shops, restaurants and entertainment facilities. The project, which is expected to cost upwards of $700 million, is a joint venture between pop star Jimmy Buffett, a favorite son of Mississippi and Harrah's Entertainment. Based in Las Vegas, Harrah's earns billions in revenues from casinos, hotels and golf courses around the country. According to the company website, the $700 million Margaritaville Casino and Resort project "is the first phase of a development that will represent an investment of more than $1 billion when completed."

Margaritaville is going up in East Biloxi, at the foot of Oak Street, the heart of Biloxi's Vietnamese community, and home to both its Catholic Church and its Buddhist Temple. Yet Biloxi city council members and Harrah's officials have recently discussed the possibility of closing Oak Street to cars, in order to offset the new traffic brought in by the casino.

Bui says the small businesses along Oak Street don't know how much energy they should put into trying to rebuild. "They want to stay, but the signals they're getting from the government is, "We're waiting for Harrah's, which will be our savior. Don't talk to us,'" he says. Bui says most small business owners are waiting nervously to see if the new, rebuilt Biloxi still has a place for them.

While some might argue for the trickle down approach that prioritizes industries and the tourist economy, neoliberal economic theories cannot justify Haley Barbour's gross misappropriation of federal CDBG dollars. CDBG funds by definition are supposed to support low-income housing. Yet, as noted by the Mississippi Center for Justice [PDF]:

Over $3 billion of the $5.4 billion Congress gave Mississippi has been granted waivers from the requirement to serve the needs of low and moderate income residents. Only $1 billion has been devoted to programs that serve these same residents. Two years later, less than $100 million from those programs has been paid out.

With over 17,000 households (close to 50,000 persons) still in FEMA trailers and others doubled up with relatives or friends, Mississippi’s housing recovery is far from complete two years after Hurricane Katrina.

Less than $100 million has been paid out to address the needs of low and moderate income hurricane survivors in Mississippi. According to the Center for Budget and Policy Priorities [PDF], it will require at least $700 million to restore public housing and HUD-subsidized housing damaged during Katrina. The Mississippi Center for Justice estimates over $900 million worth of needs unmet for low and moderate income residents of the Mississippi Gulf Coast.

Even if there were good reason to believe that the port expansion proposal will "improve quality of life for the citizens of the Mississippi Gulf Coast" (I am hardly convinced it will), how long will the project take and when will the supposed benefits reach the 50,000 Mississippians currently living in FEMA trailers?

This slide show from the Steps Coalition details Governor Barbour's criminal misuse of CDBG funds.

I am critical of Facing South for using Mississippi as a foil for Louisiana's problems post Katrina (and Rita) and thereby contributing to misconceptions about the needs of coastal Mississippians. Nonetheless, the Facing South blog provides important reporting and analysis of the post-Katrina/Rita crisis in the Gulf Coast region. Facing South's recent two-year report profiles a diverse array of Gulf Coast activists, organizations, communities and issues and should be read.