The Bush administration proposes to invest $5.8 billion in Louisiana levee reconstruction for fiscal year 2009 as part of the ongoing Army Corps of Engineers program to protect metro New Orleans against a 100-year storm.

It is the largest single source of spending in the administration's $8.8 billion budget proposal for the corps, released this morning by the White House Office of Management and Budget.

The corps faces a 2011 deadline to shore up the region's 350 miles of levees and floodwalls, which studies found to be seriously deficient at protecting the city and five surrounding parishes against Hurricane Katrina in 2005.

In its budget announcement released this morning, the White House said the corps "has already provided a higher level of storm protection for New Orleans than the area has ever had," and that the proposed $5.8 billion "will help keep the project on schedule for completion."

Louisiana lawmakers and public officials remained cool to the administration proposal, however, because it calls for state and local officials to pick up an additional $1.5 billion in necessary funding.

Sen. Mary Landrieu (D-La.) has called the proposal "too onerous" for a region that is still reeling from the destruction caused by hurricanes Katrina and Rita, while Gov. Bobby Jindal's (R) director of coastal affairs said the state has no ability to meet the proposed cost share (Greenwire, Feb. 1).

Elsewhere, the nation's ports and waterways would see a $231 million increase in operations and maintenance spending under the 2009 budget proposal, but new corps construction projects would be sharply curtailed by $887 million, according administration figures.

The White House said it "supports construction of the projects ... that provide the greatest net returns for each dollar invested."

Operations and maintenance spending on waterways would increase to $2.48 billion, up from an estimated $2.24 billion in 2008 and $1.98 billion in actual 2007 spending, according to OMB.

But meeting much of an estimated $38 billion in ongoing waterways projects will require key changes to the corps' funding structure that already have drawn sharp objections from waterway users.

The administration proposes to phase out the current system for funding many inland projects -- an excise tax on diesel fuel -- and replace it with a system of user fees charged to vessel owners or operators as they pass locks and other navigation structures.

The White House said additional revenue from such user fees is needed to meet "ongoing and future construction, replacement, expansion and rehabilitation work on the inland waterways." Such fees would be vested in the Inland Waterways Trust Fund, whose revenues are used to meet the private share of a 50 percent cost-sharing agreement with users for inland waterways projects.

But vessel owners and operators, represented by the Waterways Council, remain opposed to such fees, which also were part of last year's administration budget package. "Our position is we would oppose any new user fee until we see the projects on our priorities list being funded and progressing toward construction," said council spokeswoman Debra Colbert.

Environmental projects also would see a boost under the corps' fiscal year 2009 budget proposals, with Everglades restoration receiving a $54 million boost and Louisiana wetland restoration seeing a $17 million increase in spending.