Louisiana's Jindal Wants 30 Years to Match U.S. Levy Funding

DALLAS -Louisiana Gov. Bobby Jindal is asking the Bush administration to allow the state to match billions of federal dollars spent for coastal protection efforts over 30 years rather than the three to four years in the current legislation.

Louisiana would have to provide up to $1.8 billion in matching funds by 2011, with $1.2 billion due in 2010 alone, the governor said. The state had planned to finance the match through the proceeds of revenue bonds supported by Louisiana's increased share of offshore energy royalties, but those funds won't begin flowing until 2016 at the earliest.

The bond financing won't be possible with the shorter payback term, Jindal said at a news conference on Friday after a helicopter tour of the area. The governor said the state could issue the coastal protection bonds earlier, but the market would be wary of debt that did not have a proven record of healthy supporting revenues.

"As we get closer to 2017, I think you'll see the markets willing to give the state a substantial amount of money, in the billions of dollars, for those future royalties," Jindal said. "It's harder to do that this far away, especially given the turmoil in the credit markets today."

Earlier coastal projects required a 25% state match over 30 years, he said, but the new legislation raises the local match to 35% and requires payment in three to four years.

"It seems ridiculous," Jindal said. "I have yet to find one federal official who can explain to me why Louisiana should be paying more for our cost share."

Restoring the earlier matching provisions would cut the state's bill by $200 million, he said.

Congress passed a bill in June providing supplemental funds for the war in Iraq that contained a provision appropriating $5.8 billion for levee work in the New Orleans area by the U.S. Army Corps of Engineers. The work is designed to protect the low-lying area by 2011 by building and extending 360 miles of levees so they are capable of withstanding a Category 5 hurricane.

The original Senate version required the state to match 25% of the federal expenditures and allowed the longer payment term, but the measure passed by the House and signed by President Bush contained the shorter term and higher match share.

Jindal called on Bush to issue an executive order putting the levee project under provisions of a 1986 water resources act, which would authorize the 30-year match payback period. Otherwise, he said, Congress would have to include more acceptable terms in proposed legislation providing funds for flood relief efforts in the Midwest and firefighting in the West before it adjourns in early August.

Jindal said Louisiana was committed to meeting whatever terms are required because the levee projects are vital to its citizens.

"We absolutely will make the 2011 deadline, period," the freshman governor said. "We owe that to our people. It would be irresponsible to ask the people of Louisiana to go through even one additional hurricane season without the protection they've been promised by their government. We will keep our word to the people of Louisiana."

If the state must allocate $1.2 billion of its 2010 state budget to match the federal levee work, Jindal said, severe cuts would be required in education, health care, and transportation appropriations. The match would require 40% of the state's discretionary spending for that fiscal year, he said.

In addition, Jindal said, the $200 million appropriated by the previous administration of Gov. Kathleen Blanco and $300 million he allocated from the state's 2007 surplus for coastal protection projects would have to be spent on the levee system.

"That would set back our coastal and wetlands protection efforts by five years," said Chris Macaluso, spokesman for the Governor's Office of Coastal Activities. But there's no way the governor is going to let this opportunity slip. He's absolutely committed to meeting the matching requirement. These levees will be built by 2011."

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