Bush Proposal Maintains La. Must Share Cost for Levee Work

February 6, 2008

Pres. George W. Bush has recommended nearly $5.8 billion in federal money for levee work in the New Orleans area, but the state would have to contribute about $1.5 billion – a request some Louisiana leaders consider too steep for a region still rebuilding from the 2005 hurricanes.

The recommendation is part of Bush’s $3.1 trillion fiscal 2009 budget proposal.

Though the state has an estimated $1.1 billion surplus and the cost-share would not have to be paid immediately, U.S. Sen. Mary Landrieu, D-La., believes the amount is “quite onerous,” spokeswoman Stephanie Allen said.

Some cost-share is expected, though Landrieu plans to meet with Gov. Bobby Jindal and work with other members of the state’s congressional delegation to reduce that to “something the state can meet,” Allen said. The state has billions of dollars in unmet infrastructure needs, she said.

Sen. David Vitter, R-La., also has questioned as too-high the proposed cost-share level.

Steven Wright, a spokesman for the Army Corps of Engineers, said only a portion of the proposed $1.5 billion cost-share – at least 5 percent – would be cash; the rest, he said, would be the value of land, easements and rights of way. He did not know how much cash would be needed, but said it would “not even (be) close” to the full $1.5 billion.

So far, the corps has received about $7.1 billion in previous appropriations, and says it would need the new aid by the first quarter of 2009 to continue work aimed at assuring levee protection to meet a 100-year storm in New Orleans by 2011.

Brendan LaCivita, spokesman for the Office of the Federal Coordinator for Gulf Coast Rebuilding, said the state must come up with $229 million as cost-share for previous appropriations, bringing the total share to nearly $1.8 billion.

He said the Bush administration supports delaying the normal cost-share payment until mid-2010, but noted details on the payment had yet to be resolved. And he defended the cost-share as consistent with federal policy and standard for corps’ flood projects.

Gov. Bobby Jindal, in a statement, said the state plans to work with its congressional delegation to “improve the president’s request.”

“The state of Louisiana stands ready to pay our fair share towards this important work, but we want to be treated at least as fairly as other states that did not suffer through Hurricanes Katrina and Rita,” Jindal said.

The governor said state and local governments were paying a 25 to 30 percent cost share before the storms “and now the administration is proposing to increase this share to 35 percent. Simply using the pre-Katrina share, which has been affirmed by Congress … would save state and local governments over $200 million.

“Congress has previously allowed as long as 30 years for the payment of the local and state share in other circumstances, and we certainly believe New Orleans and Louisiana should be given time to rebuild the local infrastructure and economy to generate the necessary state and local match.”

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