BATON ROUGE, La. (AP) - Lawmakers in the state House want New Orleans and four neighboring parishes to come up with a plan to help the state pay off a hefty debt to the federal government for upgrades made to the region’s flood protection system after Hurricane Katrina.
The legislation pushed by Rep. Jerome “Zee” Zeringue, the Houma Republican who chairs the House budget committee, comes years after the deal was struck for the improvements. But the debt now is coming due, with the state on the hook for anywhere from $1 billion to $3 billion, depending on how long Louisiana takes to pay the federal government back the money owed.
The House voted 60-34 Monday for Zeringue’s proposal, sending it to the Senate for consideration and facing opposition from the lawmakers who represent the parishes being asked to pony up the money.
Zeringue said he’s asking Orleans, St. Charles, Jefferson, Plaquemines and St. Bernard parishes to “provide some good faith effort to the rest of the state.”
“It’s not asking for a specific percentage. It’s not asking for a tax,” Zeringue said. “It’s simply that those that benefit from the system help.”
Lawmakers who live in the five parishes noted that state officials signed the agreement with the federal government agreeing to the debt repayment, not the parish government leaders. They suggested Zeringue was unfairly trying to change the terms.
“It wasn’t part of the agreement initially that St. Charles Parish would be on the hook for this obligation,” said Republican Rep. Greg Miller of Norco.
The measure doesn’t specify how much money the five parishes would have to offer. It would direct the parish governing authorities to devise a plan for “contributing” to the debt and provide that plan to the House and Senate by Dec. 1.
After Katrina devastated the New Orleans region in 2005, the U.S. Army Corps of Engineers embarked on a multibillion-dollar hurricane-protection system across Orleans, Jefferson, St. Bernard, Plaquemines and St. Charles parishes.
The agreement, finalized in 2009 under former Gov. Bobby Jindal, called for the federal government to pay the full cost of rebuilding the Corps’ flood-control system that failed during Katrina, along with additional structures authorized in 1965 that weren’t complete when Katrina hit.
The agreement also called for sharing the cost of building new projects to help the region withstand a 100-year storm - such as floodgates, pump stations and surge barriers. The federal government committed to paying 65% of those costs, and fronting 35% to be repaid by the state.
The deal didn’t require the state to begin repaying its share for a decade. Congress authorized forgiveness of the sizable interest that has been accruing on the debt if Louisiana makes an initial payment of $400 million before Sept. 30 and repays the entire $1.1 billion construction cost by Sept. 30, 2023.
If the state can’t meet those terms, the 30-year repayment with interest is estimated to cost $3 billion.
Gov. John Bel Edwards is asking lawmakers to consider borrowing more than $1 billion across several years to repay the federal government more quickly and lessen the tremendous interest that otherwise would be owed.
Zeringue said Terrebonne, Lafourche and St. Mary parishes have had to pay a cost share toward levee work in their area. He said that if Louisiana has to borrow $1 billion to pay off the flood protection system in the New Orleans area, that would leave fewer dollars available to do other state-financed construction work.
“I appreciate you bringing this. I think it’s a sense of fairness here,” said Rep. Bill Wheat, a Ponchatoula Republican.
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The legislation is House Concurrent Resolution 6.
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