It isn’t often that an agency has its state funding eliminated, and rarer still when one says it can do its job after that axe falls.

But that’s what the Southeast Louisiana Flood Protection Authority-East said after learning recently that the Jindal administration had eliminated its entire $500,000 state appropriation — in what some observers believe is political payback for its lawsuit against oil and gas companies.* [Update: Documents show the authority knew about the pending cut in March, months before the lawsuit was filed.]

The Flood Protection Authority believes it can continue its work because property taxpayers in the three levee districts it supervises — East Jefferson, Orleans and Lake Borgne — will cover the shortfall.

“In the past we’ve always handed 50 percent of our costs to the levee districts, and they’re funded by property taxes,” said Tim Doody, president of the authority’s board. “So, now they’ll be paying the whole thing.”

Recent budgets have run about $1 million a year. The levee authority has received $500,000 from the state every year since its inception in 2007, except once when it was given $250,000, he said.

The cut immediately raised suspicions that it was retaliation for the levee authority’s lawsuit against 97 oil, gas and pipeline companies over damage to coastal marshes. Gov. Bobby Jindal and and Garret Graves, head of the Coastal Protection and Restoration Authority, have condemned the lawsuit. The coastal authority has control over payments to levee boards.

Graves said the Legislature appropriates the funding to his office, not to the individual levee authorities, and his office has discretion on how it is spent. “This is not a requirement; rather the AG’s office has confirmed that it is permissive,” he said in an email.

He added his agency never promises levee boards or districts a specific amount of funding each year, but makes those decisions on an annual basis.

However Doody said the $500,000-level annual funding had become so routine the Flood Protection Authority has come to depend on it.

The Southeast Louisiana Flood Protection Authority-West, which opposes the lawsuit, is getting funding from the state, which members of the East authority took as a sign that its cut was punitive. None of those board members would speak on the record.

But Graves said the cut was nothing more than part of routine budget decisions as his office struggles to spread limited funds to numerous levee boards across the coast.

“We’re putting a portion of the funds toward other priorities this year,” Graves said via email. “While we will be providing some assistance to the west board, we are also providing funds to the newly-formed Chenier Plain board. We have previously provided startup assistance to St. Mary and may be doing same to Iberia soon too. “

Graves also said the East Bank authority has little to complain about, considering how much the state is paying for the storm protection system around the New Orleans area.

“We are providing seven figures worth of assistance” now, and that will increase in the future, Graves said. “We signed on for their $1.8-billion cost share [of that system], too.”

“You’ve got other levee districts charging double the millage and a sale tax on top of that.”

The levee authority typically spends about $350,000 for its six member, full-time staff. The rest of its budget goes to contracts with consulting engineers and other professional services in order to run the massive, $14.5-billion Hurricane and Storm Damage Risk Reduction System. The authority’s board, which filed the lawsuit, serves without pay.

Doody said while his office received no notice of this cut or its possible severity, Graves’ office has warned for several years that belt-tightening was on the way.

The three districts that are part of the East Bank levee authority don’t share the costs evenly. Instead, it’s based on population, with Orleans paying roughly 57 percent, East Jefferson 31 percent. and Lake Borgne 12 percent.

Doody said the higher contributions from the local levee districts might still cost less than before the regional levee authority was created.

“Before we were created, they each had a separate board, but with the consolidation, none of them have that expense any more,” he said.

This story was updated after publication with additional comments from Graves and Doody about the state’s historical funding of the Flood Protection Authority and about how much the local levee districts contribute.

*Correction: This story originally stated that the board members learned of the funding cut Thursday, Nov. 7, but that was the day they publicly disclosed it. (Nov. 15, 2013)