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La. gets extra year to pay share for levees

Section: Business

Bill Walsh

The Bush administration will give Louisiana an extra year to come up with its $1.5 billion share of building 100-year hurricane protection around metropolitan New Orleans, the federal recovery chairman said Friday.

The administration, however, declined to waive the local cost-sharing requirement, as it has done in repairing breached levees after the 2005 hurricanes and as some cash-strapped local officials had requested.

But Gulf Coast Recovery Chairman Donald Powell said the state would have until mid-2010 -- a year longer than expected -- to come up with the money. It would supplement the $5.8 billion in levee improvements President Bush plans to request from Congress in his fiscal 2009 budget, the last before he leaves office.

"Under this president's watch, he has fulfilled his commitment to rebuild the levees to 100-year level of protection," Powell said in a telephone interview.

Significantly, the administration will designate the financing as "emergency spending," which should improve its chances of winning congressional approval since lawmakers won't have to find offsets in other parts of the budget to pay for it.

State must find money

Despite the "emergency" designation, Sen. David Vitter, R-La., expressed concern Friday that it could take too long for the proposal to wend its way through the normal budgetary-approval process. A quicker way would be to attach the financing to an emergency supplemental spending bill, such as those that finance the war in Iraq, but none are on the horizon.

"There is absolutely no way we can meet current construction deadlines doing this," said Vitter, who also estimated that the administration's $7.3 billion total for the new work was about $800 million too low. Last August the administration projected the work would cost $7.6 billion, but has since refined its figures.

Sen. Mary Landrieu, D-La., called Friday's announcement a "mixed bag" for the state. A spokesman said that she was disappointed that the federal government will not pick up more of the costs.

"We are still concerned about the size of the state's share," spokesman Adam Sharp said. "We will work with the congressional delegation and new governor to do whatever we can to bring that share down."

Plans are already under way to find the money in Baton Rouge. Edmond Preau, assistant secretary in the state Department of Transportation and Development, said that Gov.-elect Bobby Jindal's administration "is aware of the problem and they are working on it."

Preau said he was hopeful that the state could cover some of the costs out of a projected $1.1 billion budget surplus. But other administration officials have cautioned about tapping the surplus for anything but the backlog of road repairs and the $10 billion debt in the state's two largest pension funds.

"That is one of the challenges the Jindal team will have early on," Preau said. "One way or the other, the state will come up with it."
Sharing the burden

The Army Corps of Engineers has undertaken an ambitious plan to make improvements by 2011 that will provide the New Orleans area with protection against a relatively strong storm with a 1 percent chance of hitting the state in any given year, known as 100-year level protection.

Among the projects under way are: Replacing temporary pumps along the outfall canals with permanent ones; reducing the potential for a surge of water in the Industrial Canal; building a floodgate along the Harvey Canal and new levees along the Gulf Intracoastal Waterway; as well as repairing flood walls throughout the system and raising some to as high as 30 feet.

The administration's request also will cover the full remaining federal share of the $744 million for Southeast Louisiana flood-control projects that are scattered throughout the New Orleans area. The Louisiana congressional delegation has long sought to get the federal government to pay its promised share of the SELA costs, authorized more than a decade ago.

The federal government will pick up the full tab on the work to bring the hurricane protection system back to what it was before Hurricane Katrina. But the cost of improvements to bring it up to 100-year protection will be split, with the federal government paying 65 percent and the state and local governments picking up 35 percent.

Since the hurricanes, local communities are having a hard time coming up with their share, money they once could generate with a new tax. With their tax bases still depressed after the exodus of nearly 1 million residents, damage to 204,500 homes and 81,000 businesses, local officials had urged the Bush administration to pick up the full cost of the work.

But Powell said locals should share in the financial burden of beefing up hurricane protection. Altogether, the federal government has agreed to kick in 88 percent of the $14.6 billion cost of flood and hurricane protection projects in Southeastern Louisiana.

"We have to be good stewards of the American taxpayers' money," Powell said. "Traditionally, locals have always participated in the cost share."

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