Louisiana welcomed federal flood-protection money in the wake of Hurricane Katrina, a deal that didn’t require the state to begin repaying its share for a decade. But now that bill is coming due, and, in bad news for the state, it has ballooned to a dismaying $3 billion because of accumulated interest.
The looming payments have Louisiana officials worried the debt will steer money away from other risk-reduction projects in a vulnerable state worried about the next killer storm. Moreover, the debt threatens to create new budget woes in a state where the governor and lawmakers reached a hard-fought tax deal that just returned Louisiana to budget stability.
“Those numbers are just unbelievable to me,” Republican state Sen. Mack “Bodi” White, of Baton Rouge, said at a recent budget hearing.
With Louisiana’s first payment due next year, state lawmakers are bristling at the near-tripling of the cost estimate, particularly since the U.S. Army Corps of Engineers’ work on 350 miles of levees and 73 pump stations has taken years longer than promised and still isn’t done.
“The project hasn’t yet been delivered, but the interest started running from the day of the agreement. We think that is a serious problem, it’s unfair,” Democratic Gov. John Bel Edwards said.
Louisiana governors and lawmakers could have made advance payments over the years, but they allowed the debt to grow. Now, Edwards, along with Republican U.S. Rep. Garret Graves and other members of Louisiana’s congressional delegation, are trying to lessen the price tag. But their efforts were rejected during former President Barack Obama’s tenure, and they’re making little headway with President Donald Trump’s administration.
Unless something changes, Louisiana will have to repay $3 billion over the next three decades, with the first annual installment of $100 million due in August 2020. Read the full story.