I’ve benefitted from working on the cleanup, but I need to plan for the future.

Long-term personal financial planning information, job training options.

While the Deepwater Horizon Oil Spill Disaster was a negative impact on coastal Louisiana’s economy, there has been a significant finical influx from claims payments and Vessel of Opportunity income. A Study of the Economic Impact of the Deepwater Horizon Oil Spill examined the combined economic dynamics of a damaged fishing industry with these new sources of revenue. This, however, is a short-term, false economy which is buffered by one-time lump-sum payments. Similar to post-Katrina insurance payouts, claims checks change industry dynamics as peoples’ needs and spending habits are altered. For example, fishermen who were able to get Vessel of Opportunity oil clean-up contracts still spent money on diesel to run their boats, but did not need to buy ice as there were no fish to preserve. Thus, the gas supplier might have seen only small changes and the ice supplier may have gone out of business. Through this process, the dynamics of coastal economies are changing, even if there is not currently a dramatic financial loss.

GCCF claims payments may help cover temporary personal and business losses; however, long-term financial planning remains imperative. Due to the unique nature of these payments (large lump-sums) financial counseling is strongly recommended. Individuals face many investment options, ranging from paying down debt to business investment to purchasing life or health insurance. There is currently a great need for free and low-cost personal financial counseling for those impacted by the Deepwater Horizon Oil Spill. Information on finical assistance for business owners can be found on our Business Assistance page.

Currently, making long-term plans can be a daunting task given all the uncertainties about the future of the coast. In order to stabilize living situations, people are advised to seek household and mortgage counseling. When examining finances, it is important to remember that claims payments and Vessel of Opportunity incomes are taxable. The Internal Revenue Service (IRS) states that “BP payments for lost income are taxable in the same way the wages or business income these payments are replacing would have been. The law treats compensation for lost wages or income differently for tax purposes than compensation for physical injuries or property loss, which generally are nontaxable.” Given this, easy-to-access, affordable tax consultations are a greatly needed resource, particularly for individual fishermen and other workers. Amid tax filing complexities, it is important to always know your rights and seek out appropriate expertise in addition to tax filing and record-keeping assistance.

The IRS has established a Gulf Oil Spill Information Center and a hotline (866-562-5227). The special services phone line will operate weekdays from 7 a.m. to 10 p.m. local time. Claims payments and Vessel of Opportunity income are taxable.

Long-term, the concerns of impacted workers and small businesses point strongly to the need and opportunity for investing in training and assets that can increase profitability and employability. Coastal Louisiana has always had a strong, effective workforce; however, in the face of the recent oil spill disaster individuals might need to diversify their skills. Information on job trainings and certifications is available on our Job Transition page.

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