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Welcome Relief

November 12, 1987

The California Legislature has responded quickly and generously to the needs of individuals, businesses and public institutions hard hit by last month's earthquake. But state and federal agencies overseeing this disaster-relief program must administer it prudently to avoid the kind of rip-offs that occurred after the 1971 quake when some people used government grants for renovations as well as legitimate repairs.

The fact that the Legislature had to meet in special session at all to undertake this aid underscores the need for a comprehensive look at its earthquake preparedness when the lawmakers resume work in January. Readiness of hospitals, law enforcement and transportation systems to cope with a major disaster, as well as aid programs to deal with the results of such a disaster, are overdue for attention.

The legislative package, representing a welcome bipartisanship, adds $91 million in state relief to federal aid that is expected to carry the bulk of repair costs. Federal programs emphasize loans as the source of repair money, and many who own damaged homes or small businesses face staggering debt loads if loans are their only option. So the state not only increased the amount of money available for low-interest loans, but it also enacted a grant program of up to $10,000 per family. The money is intended mainly to help those who cannot qualify for the loans, such as senior citizens with no jobs but big damages.

About $15 million was added to the pool of money available for low-interest loans to rebuild private homes owned by people with low or moderate incomes or rental units occupied by low-income tenants. Interests rates on these loans would be 3%. Federal loans carry two rates--4% for those who would have some difficulty getting loans from private institutions and 8% for those who could do so more easily. Both rates are still below what the private institutions would charge.

California State University, which suffered heavy damage at its Los Angeles campus, would receive $13.5 million in state aid for repairs. In general, the state would cover 60% of the repair costs of public buildings with the federal government picking up the rest. The legislature wisely included private nonprofit agencies, such as the Salvation Army, in its damage coverage; these groups have a hard enough time financially without the added burden of earthquake debt.

The legislative remedy is termed open-ended because the state has made a commitment to provide money as long as people apply for it and are found eligible. The amount of money needed is bound to increase as people start the real business of repair, but the state must always be sure it is repairing real damages.

Obviously, there's room for abuse in the loan and grant programs. The federal aid program requires inspections to determine the true amount of damage and whether it was genuinely earthquake-related. The state programs, which would be administered by a variety of state agencies and overseen by the state Office of Emergency Services, should follow the same procedures, stringently enforced to avoid taxpayer subsidy of somebody's new kitchen. Too many people lost their homes--and their dreams--in the October earthquake to watch as others profit from their misfortune.

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