I have to decline an internal offer

BLUF: I'm worried that turning down an internal offer will look bad to my manager and my company.

FACTS:

- I'm a contractor in MD working for the Gov't. My HQ office is in VA.

- The position has needed to be filled for 2 and a half months now (by my manager).

- I assume she's had a difficult time because they're not offering enough money for the position (SharePoint Developer, making less than 75K)

- The position is in a different office at my site (who I have a great relationship with already)

- We currently don't have a presence in this office

- Three people have interviewed and didn't receive an offer

- I originally ignored the offer because it came out as a SharePoint Administrator. I develop.

- If accepted, I'd fill the position for about 6months (they currently don't have enough funding for longer than that) with no pay increase.

- If accepted, I'd have to take Security+ training (that I was told I'd have to pay for)

- The 1000 dollar bonus would go to the cost of Security+ training (I'd pay the rest out of pocket)

- If during the six months more money is made available, then I'd be on for longer

- My current position would be back-filled

The story:

So, the other day HR sent an email to everyone advertising a "HOT JOB". This means you can get a 1000 bonus if you can recommend someone for the position who gets hired. I decided to look at the requirements simply because I saw it was for a "developer". I am over-the-top happy where I am. I never planned to look for a job until the people I worked with/for retired (which is coming up soon). I was a good fit for the requirements. I called my manager to ask her about the position. I kept emphasizing that the only way I'd do it is if there was a significant increase in pay. She didn't do a HARD CONFIRM that they couldn't up the pay. Since then, I gave her my resume and I've now been granted an interview. The other day I called her about the opportunity to make more money again. During the conversation, I asked would it look bad if I got offered the position, but declined it. She said "to put it bluntly, yes". My manager is VERY Politically Correct. She never puts anything "bluntly". EVER. IN fact, that's the first time she's ever used those words to me (She's been my manager since DEC 2010, a GREAT manager at that).

My concern is that they're going to make me an offer. If HR doesn't pay more, pay for the required training (Security+) AND give me the 1000 bonus, I'm going to decline and upset my manager and the company. I don't think the demands are unreasonable. It's about a give and take. On my end, the "give" is 1-my company's first presence of a person in that office, 2-They no longer have to look for someone 3-They don't have to pay for another security clearance 4-I let my manager off the hook.

I think I'm a valuable member of my contracting team. I do really good work (based off feedback), I'm their only SharePoint presence on site (they're now branching into the IT space). I would love to go pioneer our presence and represent us, but they have to do some things for me too because of my current position. My gov't boss and co-workers are VERY happy with the work I provide.

Question: Will I really be screwing my manager and company if I decline the offer?

Sorry for the long wind and thanks for reading