The State of New Orleans: An Update

Last week this newspaper reported that more than $2 billion in reconstruction aid for the victims of Hurricane Katrina had been lost to “scams, schemes and stupefying bureaucratic bungles.” Add to this the inexcusable $7 billion allocated for temporary trailers and mobile homes, which cost far more than available rental apartments, and the scale of waste is stunning.

Nonetheless, the vast majority of the $107 billion we calculate has been allocated by the federal government has been converted by public officials and private leaders into a substantial amount of progress. In New Orleans, levees have to a large extent been rebuilt and millions of tons of debris have been cleared away. Nearly $6.4 billion in new cash assistance is now headed to Louisiana homeowners; an additional $1.5 billion will go toward replenishing affordable housing stock in the state.

Still, problems in reopening hospitals and schools and in getting city services operating will make it hard for New Orleans to attract new families, particularly the service workers that support the tourism industry. And in some ways those uprooted by the storm are doing worse than those in the city itself: of the 309,000 working age adults still displaced by the hurricane, nearly 25 percent are unemployed—a rate more than four times as high as in New Orleans itself.

The $20 billion in new spending that President Bush signed off on last month will be the last major investment for some time. We must hope that the federal agencies on the receiving end and their state and local partners find ways to spend it wisely.