Louisiana Searches for CWPPRA Funding

Louisianians are engaged in a war to save their coastal wetlands, but the greatest struggle may not take place along the banks of the Mississippi River or the Gulf of Mexico. This war may come down to a battle of the budget waged along the corridors of the capitol in Baton Rouge.

At issue is Louisiana' s inability to come up with state dollars to match the federal money targeted for wetlands restoration. The Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA) annually contributes $30 million to the state for construction of projects as varied as wetlands creation, shoreline protection and freshwater diversions. But these dollars come with a condition: for every three CWPPRA dollars spent in the state, Louisiana must come up with one dollar in matching funds. This requirement means an annual outlay by the state of $10 million to fully match federal funding.

Until recently the state match came readily. Taxes and royalties on Louisiana's vast oil and gas reserves that are automatically funneled into the Wetlands Trust Fund had always been adequate to meet the federal requirement. But as the price and the production levels for these natural resources fell, so did the number of dollars coming into the fund. In the last two years, this constitutionally-earmarked source of revenue has failed to generate enough money to completely satisfy the CWPPRA matching requirements. The result: $25.4 million of desperately needed federal funds has been left idle and possibly may be lost.

In response, the state's Department of Natural Resources (DNR) has been aggressively pursuing alternatives to plug the gap in the matching requirement. As of today, there are two promising possibilities.

The first is to increase the dollars brought into the Wetlands Trust Fund from oil and gas taxes and royalties. This could be done by lowering the thresholds that control the flow of oil and gas tax dollars into the fund. At present, the fund automatically receives $5 million each year. Additional amounts, however, are determined by the size of the total revenues from oil and gas taxes. If these revenues exceed $600 million, the trust fund receives an additional $10 million; if revenues climb to $650 million, another $10 million is shifted to the fund.

To compensate for deflated petroleum prices, DNR has proposed reducing the level of oil and gas revenues required before additional payments are made to the fund. It proposes that the thresholds should be $300 million and $350 million rather than $600 and $650 million. The result would be revenues of $20 million annually to match federal funds.

This first option would require the Louisiana legislature to propose a constitutional amendment that would then have to be approved by popular vote. DNR submitted a bill to lower the threshold in 1995, but it failed to pass. The earliest a new bill could be considered by the legislature in regular session would be 1997.

The second possibility is to reduce the amount of money the state must contribute to be eligible for federal dollars. Under CWPPRA's provisions, Louisiana could drop its match from 25 percent to 15 percent by writing and receiving approval for a conservation plan. This plan will have to guarantee that developmental activities within the state will not result in a net loss of coastal wetlands.

According to Dr. Bill Good, administrator of the state's Coastal Restoration Division, the conservation plan now being written will rely heavily on Louisiana's mitigation regulations already in place and will include elements such as incentives to landowners for wetlands preservation, anticipated technological innovations in restoration techniques and an outline of the public outreach and education effort. "We're looking to complete a draft of the plan by December of 1996," says Good. "If we have federal approval by June, we expect to have full implementation by the end of 1997."

Meanwhile, Governor Foster has taken immediate action to bring frozen federal dollars back to Louisiana while these two alternatives work their way through the system. "In his plan for fiscal year 1996-97, he is recommending $7.8 million in general fund dollars be used as a federal match," says Robert D. Harper, undersecretary for the Department of Natural Resources. "That will recover the $23.4 million left on the table over the last two years."

But the administration's commitment is far from a guarantee. In spite of all the discussion about saving coastal wetlands, it's an issue with a distant horizon competing against legislative concerns as close to home as highways and hospitals.