La. Wants FEMA to Pay for Majority of Damage to State Property

By Spencer S. Hsu and Ceci Connolly
Washington Post Staff Writers
Friday, October 28, 2005

Louisiana Gov. Kathleen Babineaux Blanco (D) is asking federal officials to pay the vast majority of the $2.3 billion in damage to state facilities wrought by hurricanes Katrina and Rita, including at least $125 million to restore the state-owned Louisiana Superdome in New Orleans.

The preliminary price tag to repair the city landmark and symbolic "ground zero" of the Katrina disaster, disclosed to state lawmakers last week, represents what Federal Emergency Management Agency officials expect to be "the tip of the iceberg" of rebuilding costs from the Aug. 29 and Sept. 24 storms that will be charged to the federal government.

Today, congressional aides say, the White House is scheduled to submit a plan to divert $14 billion to $20 billion to rebuild federal interstate highways, courthouses and the New Orleans levee system, which is owned by the U.S. Army Corps of Engineers. Levee restoration alone will cost $1.15 billion, Corps officials said.

The money would come from the $62.3 billion approved by Congress for disaster relief after Katrina struck the Gulf Coast.

While many people think of FEMA as an agency that mainly helps individuals, historically its greatest single disaster expense is to reimburse state and local governments for their losses and emergency costs. Until now, the two costliest FEMA public assistance efforts were the 1994 Northridge earthquake in Greater Los Angeles, which cost the agency $7 billion, and the Sept. 11, 2001, attacks that devastated part of Lower Manhattan, which cost $7.4 billion.

For Katrina and Rita, which spanned more than 90,000 square miles, "the numbers may begin approximating Northridge and [Florida's 1992 hurricane] Andrew in gross dollars, but the nature of damage will be different," said David Fukutomi, FEMA's infrastructure coordinator in Louisiana, who anticipates high costs to remove debris, replace obliterated parish buildings and fund long-term relief operations. "I don't know if 'bigger' is an accurate word, but it is certainly going to be different."

The $2.3 billion Louisiana estimate includes damages to state government buildings, universities, courthouses and other facilities. Of that, $500 million is covered by insurance, after a $25 million state deductible.

Blanco is seeking 100 percent FEMA reimbursement for the uninsured amount. But that is negotiable. The law requires that FEMA pay 75 percent, but the agency reimbursed 90 percent of California's costs after the Northridge quake, and covered 100 percent of New York's costs after Sept. 11, according to congressional reports.

The law says FEMA must only restore facilities to their previous quality, which the Corps expects to do for New Orleans levees. But state and local leaders say that evidently is not good enough for the flood-control barriers.

The cost to remove a projected 150 million cubic yards of debris from four Gulf Coast states will dwarf clean-up expenses of past disasters. The estimate is 10 times more than the wreckage produced by Hurricane Andrew in Florida in 1992, which was several times greater than the amount hauled away at a cost of $1.7 billion after the World Trade Center collapsed.

The cost estimates come amid slowing economic growth, spiraling federal deficits and ongoing war costs, and they are dominating budget talks on Capitol Hill. While former presidents George H.W. Bush and Bill Clinton and President Bush opened the spigots of federal relief after Northridge, Andrew and the 2001 attacks, those disasters occurred before reelection campaigns in states with big congressional delegations and political clout.

Congress is debating demands by GOP budget hawks that Katrina relief be offset by cuts in discretionary spending, which Democrats say will mainly affect programs that primarily benefit poor people. The White House plan will include unspecified cuts, House and Senate aides said, and delay other expected relief expenses to next year.

"I don't think it is right to constantly be just shifting the burden from one group of disadvantaged Americans to another group in worse circumstances," said Adam Sharp, spokesman for Sen. Mary L. Landrieu (D-La.).

House and Senate aides say that the money will be redirected from $39.8 billion in FEMA disaster relief funds that the agency has not yet tapped. An official with the White House Office of Management and Budget declined to comment publicly about the Katrina measure before it is submitted.

The bill to dry out, repair, clean and re-roof the Superdome is expected to be $125 million to $200 million. Blanco has named the arena an economic priority and symbol of recovery. It has also emerged as a political football between elected officials, the National Football League and the owner of the New Orleans Saints, the team that plays in the arena. The NFL may move the club to Los Angeles if the city does not recover, and team owner Tom Benson has not committed to staying beyond this season.

"The Superdome has become symbolic not only for New Orleans but for Louisiana, and it's a major investment for a lot of reasons in addition to the Saints," said Jim Baronet, spokesman for Louisiana's Division of Administration. "It's just too big an investment to walk away from."

FEMA paid $100 million to repair the Los Angeles Memorial Coliseum and $6 million to replace the scoreboard at Anaheim Stadium, home to the then-California Angels, after the 1994 quake.

Staff writers Michael Grunwald and Dan Morgan contributed to this report.

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