Latest flood relief bill leaves businesses underwater
Many small businesses in Waynesville’s Frog Level district were wiped out by flooding from Hurricane Helene. Jack Snyder photo
The Republican-led North Carolina General Assembly took its second step in flood recovery on Oct. 24, designating from the state’s $4.4 billion Rainy Day Fund an additional $604 million in funding and resources for disaster recovery in response to Hurricane Helene — far less than the $3.9 billion the state’s Democratic Gov. Roy Cooper wanted, and with little real help to businesses that can’t afford to take out more loans.
“Western North Carolina needs significant investments to recover fully from the worst storm our state has ever seen,” Cooper wrote upon signing the bill Oct. 25. “Legislators have taken a small step here and should follow it with a more comprehensive package to help families, businesses and communities build back stronger.”
Senate President Pro Tem Phil Berger (R-Rockingham) already seems to be looking down the road at the possibility of future disasters instead of focusing on Helene’s damage in the west.
“While this storm is much more severe than most, it is a fact that we regularly have tornadoes in the spring and we regularly have hurricanes in the in the summer and the fall,” Berger told WFAE. “We don’t want to go into next year where we are without resources to deal with the immediate needs there.”
According to an Oct. 23 summary of preliminary damage from the Office of State Budget and Management, the 1,000-year flood event that took place as Helene slammed Western North Carolina Sept. 27 dropped 30 inches of rainfall in some places, caused 1,400 landslides, left nearly a million homes and businesses without power and killed 96 people.
Across 39 FEMA-designated disaster counties, 55% of the population already suffers from housing cost burden, half a million live with disabilities, 12% have no health insurance, 12% are below the poverty line and 18% are seniors over the age of 65.
Related Items
Walz makes final campaign push in return to Asheville
Be prepared to wait before we have a president
Letting go isn’t always so easy
Choose wisely with your vote
Almost 160,000 households applied for federal assistance in the first two weeks after the storm. More than 92% of FEMA-verified flood-damaged homes did not have flood insurance. Upwards of 160 water and sewer systems and 400 hazardous waste facilities were devastated or destroyed. At least 6,000 miles of road and in excess of 1,000 bridges or culverts were damaged.
Many communities will also have to deal with the economic fallout of a stunted leaf season — big business in the tourism-driven mountain west. Sales tax and room occupancy tax collections could fall, and the longer-term impact of damage to the closures of Interstate 40 and the Blue Ridge Parkway, which has a $1.4 billion economic impact on communities close to it, will take a heavy toll.
All told, damage estimates are between $30 billion and $58 billion, but the number Cooper and the state seem to have settled on is $53.6 billion.
Of that, an estimated $6.3 billion in funding from private sources will have an impact, alongside an estimated $13.6 billion in federal funding. Together, those sources fulfill 37% of the anticipated need.
The General Assembly’s bill passed unanimously by the House and Senate, comes on the heels of a $273 million “first step” measure passed Oct. 9. With additional Helene response funds from other reserves, the bill pushes storm-related state spending to nearly $1 billion so far.
That billion adds about 2% to the total, leaving 61% of anticipated needs, or about $32 billion, unmet. For comparison, the state’s annual budget is right around $33 billion.
Key appropriations focus on essential state sectors, with notable allocations to the Department of Public Instruction and the Department of Environmental Quality.
More than $100 million in educational initiatives include $65 million to the Department of Public Instruction and $16.75 million to the North Carolina Community College System, enhancing school infrastructure and flexibility in school calendars for areas impacted by the hurricane.
An additional $20 million in education funds also support tuition relief for community college students, including a one-time $5 million grant to be split among Asheville-Buncombe Technical Community College, Blue Ridge Community College, Mayland Community College, McDowell Technical Community College, Western Piedmont Community College and Haywood Community College.
“We would apply that in the financial aid office to students’ accounts as they re-enroll,” said Shelley White, president of Haywood Community College. White thinks the assistance will encourage students to return for the spring semester.
Postsecondary students at 14 community colleges, including HCC and Jackson County’s Southwestern Community College, will also be able to take advantage of an emergency scholarship program that will provide up to $2,500 for each student impacted by Helene. The funds can be used “to cover any expenses that support a student’s continued enrollment, including costs related to transportation, textbooks, tuition, fees, and living expenses,” per the bill.
Another 10 colleges and universities, including Appalachian State University, Brevard College, Gardner- Webb University, Lees-McRae College, Lenoir-Rhyne University, Mars Hill University, Montreat College, UNC-Asheville, Warren Wilson College and Western Carolina University, will also be able to avail themselves of the emergency scholarships.
“While WCU’s campuses in Cullowhee and Asheville received no major physical damage, our faculty, staff and students continue to be impacted by the aftermath of Hurricane Helene,” said Kelli Brown, WCU’s chancellor. “We are grateful for the acknowledgment and funding from the General Assembly in aiding WCU students and the region.”
Students at those universities will also be eligible for tuition relief; UNC-Asheville was awarded its own separate $5.5 million funding stream. Additional support for mental health was also included in the bill.
The Department of Health and Human Services will receive $71.4 million to aid mental health and support services, particularly for affected students and families. The bill further facilitates temporary license extensions for adult care homes and healthcare waivers to expedite workforce recovery in hard-hit regions.
“Helene has been a devastating event, bringing tragic loss of life and widespread damage across Western North Carolina. Many residents now face urgent needs for housing, mental health support, and essential resources for their well-being. Meanwhile, critical infrastructure —including roads, child care facilities and safe spaces for seniors — has suffered severe setbacks,” said Ira Dove, Haywood County health and human services director. “Substantial funding will be essential to meet these needs and provide support for our most vulnerable community members. As we look forward to the upcoming legislative session, we are grateful for the opportunity to work together to help our region recover and rebuild stronger than ever.”
Historic Frog Level in Waynesville. Cabell Tice photo
Rental assistance, in the amount of $1 million, will be split among departments of social services in affected counties for distribution to households at or below 200% of the federal poverty level experiencing hardship due to Helene.
Golden LEAF (Long-term Economic Advancement Foundation), founded in 1999 to administer the state’s share of a settlement agreement with cigarette manufacturers, will receive $10 million to assist in the recovery and expansion of food banks. The nonprofit has provided more than $1 billion in economic development grants over the years, and recent figures peg its endowment at $1.34 billion.
Environmental and infrastructure recovery projects will receive $139 million managed by the Department of Environmental Quality to restore water systems and implement long-term solutions for damaged infrastructure. Most of the funding — $100 million for emergencies and $22 million to remediate underground storage tanks — comes in the form of loans, not grants.
The bill also gives DEQ flexibility in moving money around, waives certain fees and exempts local government units from seeking approval by the Local Government Commission for emergency loans. The Department of the Treasurer, which administers the LGC, was appropriated $100 million for five-year cashflow loans to local governments.
LEFT A LOAN
Western North Carolina’s small businesses were left with little more than the option to take out a loan — much to the dismay of some officials.
Golden LEAF will administer a total of $50 million in loans to impacted businesses, with a maximum amount of $100,000 and interest rates between 1% and 6%. Loans must be paid back by June 30, 2030.
The problem is, plenty of small businesses had already taken out 30-year EIDL loans (Economic Injury Disaster Loans) for COVID-19 relief from the Small Business Administration at 3.75% interest between April 4, 2020, and Nov. 14, 2020.
Most of those borrowers remain reticent to incur more debt.
Data collected from the SBA, cross-checked by The Smoky Mountain News with data from usaspending.gov, shows just how many loans were taken out, and presumably are still out there, keeping business owners underwater.
Across North Carolina, 93,868 legal business entities took out EIDL loans during COVID with a face value of $4,298,324,458.
In what was then the 11th Congressional District, there were exactly 5,400 EIDL loans disbursed in 88 municipalities or communities totaling $254,367,800.
Entities located in Asheville received 788 loans for $38 million while Hendersonville businesses logged 524 loans totaling $27 million — the highest totals in the 11th, in some of the areas hardest hit by Helene.
Haywood County wasn’t affected as badly by Helene as Buncombe and Henderson counties were, but the damage was still felt across the entire county.
Waynesville businesses, with the third highest COVID loan numbers in the 11th District, received 260 loans totaling nearly $12 million. Maggie Valley businesses took out 84 loans, topping $4 million. Businesses in Clyde had 57, almost reaching $2.3 million. Businesses along the Pigeon River in Canton received 84 loans at a total just shy of $4 million.
But Canton was also hit by deadly flooding in August 2021. Residents there took out an additional $2.6 million in SBA loans to recover from Tropical Storm Fred.
On Oct. 16, Canton Mayor Zeb Smathers called for direct grant assistance for small businesses. The next day, during a visit to Canton, Sen. Thom Tillis and Cooper both addressed Smathers’ call.
“I think that the legislature is going to need to look at some kind of small business grant program to help them get on their feet, to encourage them to stay here,” Cooper said, as Tillis talked about possibly restructuring or consolidating prior federal relief to open up more opportunities.
The OSBM summary estimates 45% of the state’s gross domestic product comes from storm-impacted counties and that Western North Carolina’s economy will need at least $13 billion to prevent “an economic spiral.”
“Lots of people need lots of things right now, but there’s still people paying off loans from COVID,” said David Francis, president and CEO of the Haywood Chamber of Commerce and Haywood County’s economic development guru. “As business friendly as this state is, I’d like to see more help come to our business community.”
Cooper’s proposed recovery spending included $475 million for a Helene business recovery grant program. Legislative leaders paid little mind to Cooper’s proposal, but are scheduled to return to Raleigh on Nov. 19 and may take up additional relief at that time.
“I would like to see more grants,” said Sen. Kevin Corbin (R-Macon), who added that his western delegation had talked about the issue, but that grants for small businesses were not typically part of relief packages in the past for hurricanes down east. “We just needed some time to assess, to see what happened and what’s needed.”
Looking back at the $201 million Disaster Recovery Act of 2016 passed in the wake of Hurricane Matthew, Corbin’s right. Among other things, the Act appropriated $20 million in grants to local governments for infrastructure expansion that supports residential development outside the 100-year floodplain. An additional $10 million in grants was allocated for the same purpose, but in rural areas. Only $5 million was appropriated for small businesses — loans, not grants.
“The bottom line is, we’re being cautious with the state’s resources,” said Rep. Mike Clampitt (R-Swain) who also represents Jackson and Transylvania Counties. “I know people don’t want another loan, but at the same time, we don’t want to overextend and underperform.”
Clampitt said he made an internal push for a moratorium on evictions and foreclosures, as happened during COVID, but those provisions didn’t make it into the final bill.
Buncombe County Democratic Rep. Eric Ager said the bill was “completely inadequate,” and called out the slow trickle of money from both the state and federal levels.
“I think that businesses need grant money or a forgivable loan program in order to get back up and running,” Ager said. “Many small businesses were just getting their heads back above water following COVID and I worry that loans won’t be enough of an incentive to do the huge amount of work necessary to get back on their feet again. Western North Carolina has been helping to pay for disaster recoveries in other parts of the state for more than a century and I’m disappointed that the General Assembly has so far been unwilling to make the large investment needed to help the West in this difficult time.”
Ager’s fellow Buncombe rep and Democratic nominee for the 11th Congressional District, Caleb Rudow, is worried about small businesses’ ability to survive.
“It’s not like they don’t have any loans already,” Rudow said Oct. 26. “These are loans on top of loans at a time in which we should be giving people money to rebuild. We are making it way harder.”
Rep. Mark Pless (R-Haywood) thinks it will be the General Assembly’s long session in January 2025 when more major flood relief components from the state come into focus — largely because hard numbers for damages aren’t yet available in some cases, like for the state’s agricultural losses.
Another thought, Pless said, may be loan forgiveness for municipalities, but on the subject of grants for small businesses, state leaders seem to be waiting for help from above.
“I think what will end up happening is we won’t do grants, but the feds will,” he said.
As of press time on Oct. 29, Republican Speaker of the U.S. House of Representatives Mike Johnson still had not committed to calling Congress back to Washington for a vote on federal Helene relief, calling it “premature.”
Small business owners in the 11th Congressional district might beg to differ and might not be able to wait much longer.
In an Oct. 29 call from President Joe Biden, Smathers reiterated his Oct. 16 plea.
“One of the major points I raised was the importance of small businesses, and giving them the tools to recover,” Smathers said. Smathers added that the president expressed frustration at the slow pace of congressional action and agreed with Tillis that now was the time for action.
“Every day matters,” Smathers said.
Congressman Chuck Edwards (R-Henderson) did not respond to an interview request from The Smoky Mountain News about calling Congress back to Washington to pass federal aid for his district.
