(AP) — FEMA has urged a federal arbitration panel to reject claims that the state is owed $492 million for hurricane damages to LSU’s Charity Hospital in New Orleans.It’s the latest development in a fight over funds that are key to LSU’s finance plans for construction of a new $1.2 billion academic medical center.The state dropped a FEMA appeal and decided to go the arbitration route to expedite a decision in a long-standing dispute that stems from 2005 Hurricane Katrina damages that shuttered the hospital.FEMA’s position is detailed in a 92-page response filed with the arbitration panel Monday and released to the media Tuesday by LSU.The Federal Emergency Management Agency argues that only $126 million is owed. It says “the applicant has failed to meet its burden to demonstrate FEMA was arbitrary and capricious.”–Contact The Daily Reveille’s news staff at [email protected]