Katrina anniversary: How well has recovery money been spent?

Money from charitable foundations and $142 billion in federal funds have produced a substantial recovery in metro New Orleans, says a report released ahead of hurricane Katrina anniversary.

Gerald Herbert/AP
A man and child walk past a destroyed by Hurricane Katrina and abandoned, yet next to repaired homes, five years after the storm, in the New Orleans East section of New Orleans, Sunday.

The people of New Orleans may disapprove of the way President Obama has handled the Gulf oil spill, but when he arrives this weekend to mark the fifth anniversary of hurricane Katrina, he is likely to encounter mainly welcoming audiences. It's not just a matter of Southern hospitality: Residents here know their city's future is still bonded to billions of dollars in federal disaster recovery funding.

It’s been money well spent in metro New Orleans, producing a substantial recovery from Katrina, according to an independent report released this month. The report, compiled by the Washington-based Brookings Institution and the Greater New Orleans Community Data Center, analyzed 20 indicators of prosperity such as repopulation, housing costs, local tax collections, and the reopening of schools. It concludes that the New Orleans area is poised to become a safer, more sustainable, and economically stronger city than it was before the storm.

“New Orleans is still a work in progress, but a lot of nonprofit organizations, foundations, and community organizations have come together to bring real change to the city,” says Amy Liu, deputy director of the Brookings Institution’s Metropolitan Policy Program. Most of the funding for these efforts has come from the federal government, along with philanthropic organizations such as the Rockefeller and Gates foundations, says Ms. Lui.

IN PICTURES: Hurricane Katrina five years later

Much of the $142 billion in federal recovery funding for the Gulf Coast was appropriated by Congress under President Bush, and his administration created the framework for the region’s recovery. But Liu credits the Obama administration with speeding up the recovery by cutting through bureaucratic gridlocks that were holding up funding, and appointing a Cabinet that has taken a stake in reforming of the city’s public-service sector.

“The arbitration panels that the administration created to unblock FEMA funding really accelerated the spending of infrastructure dollars, and the Cabinet has otherwise been very involved in New Orleans, coming here often to make sure that rebuilding and reforms of the schools, of the police department, of city government are moving forward,” says Liu.

According to the White House, Mr. Obama’s efforts have freed up more than $2.25 billion in FEMA public-assistance dollars for Louisiana recovery efforts since he took office. High-level members of his administration have visited the Gulf Coast 155 times. Ahead Obama's visit on Sunday, eight Cabinet members and agency heads are slated to spend all or most of four days in the city visiting schools, health clinics, and nonprofit recovery organizations.

Among the recovery projects in the region funded by the government: $247.5 million in federal block grants for improvements of local school districts; $130 million for rebuilding local criminal justice systems; $85 million in new HUD housing vouchers; and $47 million in grants for medical services in underserved areas.

New Orleans still has $411 million in unspent federal Community Development Block Grants. Moreover, the Obama administration’s economic recovery program, which is providing stimulus funding for state projects nationwide, has sent more than $5 billion to Louisiana.

Early on, even Republican Gov. Bobby Jindal gave credit to the administration for its efforts. But Obama, who during the 2008 presidential campaign criticized Mr. Bush for his handling of the Katrina catastrophe, has received widespread criticism in the region for his handling of the BP oil spill and the deep-water drilling moratorium that followed. A Washington Post-ABC News poll last month found that 73 percent of residents throughout the Gulf region disapproved of his job on the crisis. A poll conducted this summer by Louisiana State University found that 35 percent of residents in southern Louisiana rated his performance as not so good or poor, while 37 percent rated it as good or excellent.

“Obama’s ratings are generally higher in Louisiana, especially in New Orleans, but his rating in our poll was more positive than I expected,” says Kirby Goidel of LSU’s Reilly Center for Media and Public Affairs. “His big problem was the spill and now it’s the [drilling] moratorium. There’s still significant worry about all this, with still a lot of uncertainty.”

Historian Lawrence Powell of Tulane University was critical of Obama’s grasp of political theater during his first visit to the city as president last year, but now says Obama has found his step.

“I think he’s righted himself and put together a good team and is doing better with his execution” says Professor Powell. “Many people here are criticizing the cleanup and the moratorium and calling this his Katrina. I think that’s wrong, but this is a difficult place right now. People want continual reassurance, but they also seem to want contrary messages. Some want to hear that the oil spill is the worst possible disaster; others that it’s not so bad, that we’re open for business.”

The triple whammy of Katrina, the oil spill, and most severe national recession in 50 years is a lot to recover from. Other problems, as well, are holding the city back, says Liu of the Brookings Institution. Among them: a low-growth economy dependent on a few shrinking industries, a workforce that isn't highly educated enough, high poverty, high crime, and eroding wetlands. Her report also notes that some of the upward trends in recovery statistics, such as median incomes and education levels, can be attributed in part to the tens of thousands of lower-income minorities who have not been able to return to New Orleans.

IN PICTURES: Hurricane Katrina five years later

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