Annual appropriations to the Augusta Canal National Heritage Area could become competitive grants under federal budget revisions proposed for fiscal 2007.
The proposed change could raise questions over how - or if - the Canal Authority would continue to get federal dollars for maintenance and operations of the towpath, trail system, interpretive center, boat tour program and other amenities.
"The unknown is the big thing," said Dayton Sherrouse, the authority's executive director.
"It constitutes a major change from the rules we've operated under since the original designation in 1996."
The Augusta Canal was among the first National Heritage Areas designated by Congress, and it is the only such area in Georgia. Nationwide, there are now 27 heritage areas.
The legislation that created the Canal Heritage Area authorized up to $1 million a year, although actual budgets have been less - and are shrinking.
The fiscal 2006 allocation was $338,000, falling from $400,000 in 2005 and 2004 and $600,000 in 2003.
Under the Bush administration's proposed budget, funding for heritage areas would fall under the category of the Historic Preservation Fund, limiting heritage area programming only to historic preservation projects.
The proposal also would change the current system of direct appropriation from Congress to a competitive grant program administered by the National Park Service - which could place the Canal Authority in competition with some of its favorite partners and supporters.
"Presumably it could have us competing against state historic preservation agencies, like Georgia's Department of Natural Resources, because their funding would come from the same fund," Mr. Sherrouse said.
Similar problems could arise at other heritage areas, prompting the Alliance of National Heritage Areas to lobby against the budget changes.
"This proposal is puzzling at best and preposterous at its worst," said John Cosgrove, the organization's director.
The Augusta Canal is one of the nation's most active heritage areas and has undertaken a host of capital improvement projects and historic renovations. It has also developed some supplemental funding sources.
Transportation Enhancement Act grants have provided $3,771,000 in matching funds for canal projects that included the trail system, Petersburg Boat program, restoration of locks and historic buildings and many other projects.
The most recent grant, $550,000, is earmarked for a new trail system through the canal's third level, which planners are now eyeing as a major new redevelopment zone.
The authority also gets funds from the sale of canal water to textile mills, hydropower revenues and proceeds from boat tours and visitor center admissions.
The heritage area, however, still depends heavily on annual congressional appropriations, Mr. Sherrouse said.
Authority members will be briefed on the situation at a Thursday night meeting and asked to write letters to U.S. senators and representatives in support of continuing appropriations at levels comparable to those in past years.
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