Federal Government Gives Louisiana More Time to Repay Funds for Levees

Wed August 27, 2008 - Southeast Edition
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NEW ORLEANS (AP) The federal government has agreed to give the state up to 30 years to repay its $1.8 billion share for levee improvements in the New Orleans area — money that initially had to be repaid by 2011.

The announcement came Aug. 7 after Gov. Bobby Jindal met with President Bush’s hurricane recovery chief, retired Maj. Gen. Douglas O’Dell.

“This is a substantial commitment to the protection of lives and property,” O’Dell said.

Recent federal legislation had required that Louisiana pay $1.8 billion by 2011 to trigger $5.8 billion in federal spending for levees in the New Orleans region.

But state officials had argued a three-year payment plan was too short — that it would hurt recovery efforts in the region following the 2005 hurricanes and take money from other programs. Jindal said it would have required the state to pay hundreds of millions of dollars next year and more than $1 billion in 2010.

Congressional Democrats visited the region in July, ahead of the three-year anniversary of Hurricane Katrina on Aug. 29. They had called on President Bush to give the state more time, saying it was within his power to do so through an executive order.

Under the new agreement, payments wouldn’t start until 2011 — the Army Corps of Engineers’ target date for strengthening the levee system around New Orleans. And the payments, depending on interest set by the U.S. Treasury Department, are expected to range from $95 million to $105 million a year, Jindal said.

Costs would be shared by five parishes — Orleans, Plaquemines, St. Bernard, Jefferson and St. Charles — and the state, with the state guaranteeing the payment, Jindal said.

The extension will allow the state to “aggressively pursue” efforts to restore Louisiana coastline and coastal wetlands, a key buffer against storms, he said.

“The state of Louisiana is committed to do everything we can to make sure the corps completes the levee on time,” Jindal said. With the agreement, the state also can make sure it has the “healthy wetland that is so important.”

Garret Graves, chairman of Louisiana’s Coastal Protection and Restoration Authority, said officials would meet to decide how to spend $300 million that had been set aside by lawmakers for hurricane protection and restoration. A decision had been delayed in case the state needed the money for levee bills.

In a statement, U.S. Sen. Mary Landrieu, D-La., said that while she would have preferred to see this agreement sooner, she was grateful nonetheless.

“These repayment terms will allow our state to more smartly prioritize its resources and dedicate them to other immediate, unmet recovery needs still at hand,” she said.

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