This morning, the Environmental Protection Agency rejected the $510.9 million federal loan New York state had requested from a clean water program to pay for the Tappan Zee Bridge replacement project. Only $29 million worth of TZB work is eligible for clean water money, the EPA’s regional office ruled, averting a dangerous precedent that could have let governors across the country raid environmental funds to pay for highways.

“New York’s request presents a unique circumstance that is unprecedented… no other state has made a request of this type or magnitude,” wrote Joan Leary Matthews, regional director of EPA’s clean water division [PDF]. “There is no evidence… that the [Clean Water State Revolving Fund] was intended to fund mitigation for major construction projects within an estuary. Construction activities arising from transportation projects do not advance water quality, and CWSRF funding should not be used for these purposes.”

The Thruway Authority had planned on using the $510.9 million loan on twelve projects. Today, EPA rejected seven of those projects, totaling $481.8 million, because they are directly tied to building the new bridge. The projects deemed ineligible are: removal of the existing bridge, dredging for construction vessels, armoring the river bottom, installation of an underwater noise attenuation system, construction of a bike-pedestrian path on the new bridge, restoration of oyster beds, and the installation of a falcon nest box.

The state will be able to receive funding for five projects, totaling $29.1 million: the restoration of Gay’s Point and Piermont Marsh, the installation of stormwater management measures, and the creation of a conservation benefit plan, including an Atlantic sturgeon outreach program.

Environmental advocates and good government groups staunchly opposed the loan, saying that allowing clean water funds to be used for highway construction would set a dangerous precedent. “It’s great that the agency in charge of calling balls and strikes has called the state out,” said Peter Iwanowicz, executive director of Environmental Advocates of New York. “But we shouldn’t have gotten here in the first place.”

Iwanowicz said the state should have asked the EPA for this ruling before it pushed forward votes on the loan. In June, the state Environmental Facilities Corporation, which administers the clean water fund, unanimously approved the $510.9 million loan. In July, the Public Authorities Control Board’s three voting members — who represent the state legislature and the governor — signed off on half the loan, and the Cuomo administration promised to come back later for the rest.

“It’s always better to go and ask first if these projects are eligible [before approving the loan],” Iwanowicz said. “Anybody who voted for this loan should be wondering why they voted without all the facts.”

The state briefed Washington-based EPA staff on the project in May. “We got indications from them that we can move forward,” EFC spokesperson Jon Sorensen told Streetsblog in June. Today’s rejection by the regional EPA office is an affirmation that watchdogs within the agency aren’t about to let politically favored projects bypass the rules and common sense.

“We are deeply troubled with the process that the state used,” Iwanowicz said. “It was a bankrupt process that could use some judicial review. Certainly there’s an ongoing investigation by the Authorities Budget Office.”

“New York tried to do something that was unprecedented,” Iwanowicz said, noting that other states could have tried to use the clean water fund as a highway construction piggy bank if EPA didn’t step in. “People were waiting to see if New York could get away with it.”

Update: The state is downplaying the importance of the loan while vowing it will appeal the decision to an EPA dispute resolution official. “While this loan is not integral to the overall bridge construction, the projects identified here will clearly provide significant benefits for the Hudson River Estuary,” EFC spokesperson Sorensen said in a statement. “EPA Region II is simply wrong in its assessment. We will appeal this decision.”