Proposed cuts to LIHEAP would leave state policymakers in a lurch

Rep. Janet Ancel, D-Washington. VTD/Josh Larkin

Rep. Janet Ancel, D-Washington. VTD/Josh Larkin

Vermont residents who are eligible for fuel assistance sent an unequivocal message to lawmakers on Tuesday: We’re cold, and less assistance coupled with higher fuel prices will force us to make tough decisions.

If Congress cuts the Low Income Heating Assistance Program, many Vermonters who rely on subsidized fuel oil will have to choose between buying groceries and heat for their homes.

Three committees in the House of Representatives — Human Services, Natural Resources and Energy, and Ways and Means — took testimony on the impacts of reduced federal funds on Vermonters.

Carol Shephard, 60, said decreased assistance to heat her South Royalton home may force her to choose between food, prescriptions or heating this winter.

“I’m cold all the time,” Shephard said in testimony.

Shephard said the $319 she got this year for heating assistance was not enough.

“I don’t know what to do,” she said. “Why take money away from those who need it most.”

Jean Park, 81, said she received $220 for the winter season to heat her mobile home in Bennington. By the time Congress decides what to do about funding for low-income people, it might be too late because she said she might already be frozen. The assistance will not be enough to keep her warm.

“It’s a mean rotten selfish thing for the government to do to its own people,” Park said.

Last year Congress gave a total of $4.7 billion in Low Income Home Energy Assistance Program funding to low-income households. A proposal by the Obama administration to control spending would decrease that amount to $2.57 billion. Appropriations bills in the Senate and the House would provide $3.6 billion and $3.4 billion respectively.

For Vermont, the spending cuts could mean cutting funding the state receives from about $27.5 million in 2011 to around $11.6 million for 2012.

Vermonters who make 185 percent of the federal poverty level are available for heating assistance, according to numbers from the Department of Health and Human Services. On average, in 2011, those who received assistance got about $866 for the fuel season. Under the Obama proposal, the average benefit would be $373.

Rep. Tony Klein. VTD/Josh Larkin

Rep. Tony Klein. VTD/Josh Larkin

Rep. Peter Welch and Sen. Bernie Sanders have introduced legislation in both the House and the Senate to restore funding in 2012 to the $4.7 billion level nationally. Congress will make a decision about the funding In the coming weeks, but at the state level, people are already pitching ideas for how to deal with the shortfall.

One is a transfer loan of $2.5 million from the state’s Weatherization Trust Fund to make up for part of the shortfall in LIHEAP funding. This additional funding would bring the average benefit for those receiving assistance up from $373 for the fuel season to $474. Weatherization assistance is funded at the state level via a gross receipts tax on bulk fuels. Oil and propane distributors that receive more than $10,000 annually for the sale of bulk fuels pay one-half of 1 percent of the retail sale of fuel through the tax.

The problem with this proposal is that the Weatherization Trust Fund is already in trouble. One million dollars in funding from the Department of Energy is already threatened by budget cuts and American Recovery and Reinvestment Act funding sunsets.

Liz Schlegel, director of community outreach for Central Vermont Community Action Council, says borrowing from the Weatherization Trust Fund is a shortsighted idea.

“It’s not good economic policy to do a short-term fix at the expense of a long-term fix,” Schlegel said.

Schlegel says the short-term fix for heating assistance may be necessary, but weatherization is something that can reduce energy use for years to come rather than the band-aid approach of simply helping people out with fuel bills. Another piece of the puzzle, Schlegel said, is looking at better ways to take care of the state’s low-income people amid looming budget cuts at the federal level.

“We need to take care of people holistically,” she said. “They’re not in a vacuum.”

The potential decreases in LIHEAP funding are frightening for low-income Vermonters, but there are some creative ideas that could help make up for the shortfall.

James Reardon, commissioner of the state Department of Finance and Management, said $23 million in the Human Services caseload reserve account as well as funding from the state’s revenue shortfall account are available. He made clear, however, that he was not advocating using those funds.

Fuel dealers are also required to offer a discount to customers who receive fuel assistance. This year, it is 10 percent.

Matt Cota of the Vermont Fuel Dealers Association took a shot at Vermont’s natural gas utility — Vermont Gas Systems — which is not subject to the fuel discount.

Cota also floated the idea of a itemizing the gross receipts tax on customers’ fuel bills, much like the energy efficiency surcharge gets tacked onto electricity bills.

Michael Sirotkin, legislative advocate for the Community of Vermont Elders, offered a few ideas for funding the potential shortfall.

For one, the state could increase the gross receipts tax, dip into the state’s rainy day fund and caseload reserve, or access $10.8 million that has been set aside to deal with federal cutbacks.

Sirotkin also proposed having the state’s two largest utilities pay into the fund if the Vermont Public Service Board approves a merger between Green Mountain Power and Central Vermont Public Service — the state’s two largest utilities. In the 1990s, both utilities locked into a contract with Hydro-Quebec which ended up losing money. The Public Service Board approved a ratepayer bailout so the utilities would not go bankrupt with the caveat that in any future merger or acquisition above book value, the utilities would have to share the profits with ratepayers. The utilities contend, however, that the savings the merger will provide compensate for this.

While the joint committee meeting continued at the state house, Speaker of the House Shap Smith, Senate President Pro-Tempore John Campbell, Chair of the Senate Appropriations Committee Jane Kitchel and Chair of the House Appropriations Committee Martha Heath penned a letter to the Vermont Congressional Delegation supporting their work to retain LIHEAP funding.

Gov. Peter Shumlin held a telephone press conference on Tuesday with officials from Massachusetts and New Hampshire, urging members of Congress to full fund LIHEAP before the holiday break.

“We do not have the resources to make up all the funds to make sure (residents) don’t freeze in their homes,” Shumlin said.

For now, says Fuel Assistance Program Chief Richard Moffi, the state may hear at the end of the week what Congress plans to do with the program or not. He said the program was dealing with budget uncertainties until March last year.

Luckily for low-income Vermonters, it has been a mild November.

But on the stormy political front, Moffi said, “it’s been really frustrating this year.”

Alan PanebakerAlan Panebaker

Comments

  1. Tom Pelham :

    The contrast couldn’t be more stark. On the one hand we have the article above profiling sincere worries about folks freezing this winter and calls for raiding the Weatherization Trust Fund which is used to achieve greater energy efficiency in the homes of low income Vermonters. On the other hand, we have this recent press release

    http://www.vermonttiger.com/content/2011/12/how-many-dollar-bills-are-lying-on-the-ground.html

    from Efficiency Vermont announcing a new program to subsidize energy efficiency investments for 60 of Vermont’s largest non-residential energy users,including “millionaire and billionaire” corporations. Energizer, for example, last year had revenues of $4.65 billion (about the size of the entire Vermont state budget) and profits of $261 million. Over the past 2 years, Efficiency Vermont’s budget has increased by about 33% or $10 million, fueled by an increase in the surcharge on everyone’s electric bills, including low income households. This all seems a clear example of the programmatic silos within state government not working in a coordinated manner.

    As an aside, some of the pressures on Vermont’s LiHeap budget are self-inflicted. The notice below on the programs welcoming page

    http://dcf.vermont.gov/esd/fuel_assistance

    announces a recent change in eligibility standards and the elimination of the resource test and accurately states the consequence that “as more families participate in the program, the benefits will be smaller.”

    Who is eligible?

    Two recent program changes mean more Vermont families may be eligible for Fuel Assistance:
    1. The monthly income limits have been increased; and
    2. The resource test has been eliminated.
    You may be eligible if your gross household income is equal to or less than 185% of the federal poverty level, based on household size — regardless of the resources (e.g., savings, retirement accounts, or property) that you own. Click here for the 2011-2012 income guidelines.

    How much help can I get?

    As more families participate in the program, the benefits will be smaller. This means that you should plan to pay a bigger portion of your heating costs this coming winter.

  2. Nicole LeBlanc :

    This problem could easily be solved by raising taxes on the top 1%. If congress isnt going to help then we need our legislative leaders and the administration to step up and raise the revenue necessary to meet our basic human needs!!!! Its to adopt a budget based on human needs! Stop managing to the $$$$

  3. Bob Stannard :

    OK Tom, so what’s the Republican’s Campaign for Vermont plan to address the concerns of people freezing to death this winter?

    It’s all well and good to chastise those who are trying to help Vermonters, but it might be helpful if you could be, well, helpful.

  4. walter carpenter :

    It is all rather crazy. We are subsidizing people on low or fixed incomes unable to afford the price of heat because the oil companies that we also subsidize in various ways are gouging us by keeping the prices too high. I hope that our delegation can restore the funding. It is not fun to be without heat for a vermont winter.

    “Its to adopt a budget based on human needs! Stop managing to the $$$$.”

    Right on, Nicole, thanks for putting this out there.

  5. Tom Pelham :

    Bob…fair question:

    The first priority is to not unnecessarily scare LIHEAP beneficiaries such that reporter Panebaker can readily craft the formulized “grandma’s going to freeze” story lead that “If Congress cuts the Low Income Heating Assistance Program, many Vermonters who rely on subsidized fuel oil will have to choose between buying groceries and heat for their homes.” This lead is a complete misdirection as there are numerous options to steer a different course and every person of influence in the legislative committee rooms knows it. The truth here is that state leaders don’t want to put a specific remedy on the table for this problem until it’s clear that they can’t leverage congress into restoring funding and take the financial hit at the federal budget/deficit level.

    Second, I would urge you recognize that Art Woolf is right in this post at Vermont Tiger http://www.vermonttiger.com/content/2011/12/theres-more-to-the-story.html that LIHEAP funding was dramatically increased on a temporary basis as part of the federal stimulus in 2009 (Vt’s share went up from $25 million to $35 million). President Obama is simply staying true to the understanding that these were temporary funds. This is a teachable moment for legislators about sustainable spending.
    For Vermont to raise the eligibility standard from 125% of poverty to 185% of poverty in the face of temporary increases in LIHEAP funding in 2009 has put those at 125% of poverty or below at greater risk now.

    However, hindsight is 20/20 and what’s needed now is both a short term fix should the feds hold their ground on returning LIHEAP funding back to pre-stimulus levels as well as a long term strategy that’s sustainable.

    Short-term, here’s just one option:

    You can go here http://www.leg.state.vt.us/jfo/appropriations/fy_2012/FY2012_BAA_Operating%20Statement%20GF%20FY%202008-2012.pdf to view the profile of the Governor’s recommended 2012 Budget Adjustment. There are a few large windfalls that jump off the page. “Current Law Revenues” are up by $7.3 million. “Direct Applications and Reversions” are up by $10.2 million, due to a great extent because federal participation is now available to AHS now that Tropical Storm Irene has force the closure of the Vermont State Hospital, which the fed’s had decertified. These windfall revenues, among others, have allowed the Administration to propose putting aside $16 million in an “Emergency Relief Fund” for Irene while still leaving $22 million in the Human Services Caseload Reserve and a full Rainy Day Fund. By not funding all or a portion of LIHEAP with these windfall revenues, the administration has made the choice to not resolve funding for LIHEAP nor give assurances to LIHEAP beneficiaries in order to preserve cash that can address their fiscal 2013 budgetary problems. This is a choice made with the hope that the downside risk of that choice will be covered by the efforts of Senator’s Leahy and Sanders and Congressman Welch to increase federal LIHEAP funding.

    For the long run, Vermont can “crack a few eggs to make an omelet” by breaking down silos in state government and unite funding related to energy efficiency and energy subsidies. Currently, our energy and energy efficiency efforts are scattered across numerous agencies and departments in state government. These include Efficiency Vermont, the Weatherization Program, LIHEAP, the Regional Greenhouse Gas Initiative, AARP’s new $7.4 million electric bill subsidy program, Forward Market Capacity funds, the Clean Energy Development fund, among others. These alone add to over $100 million but the fact that they are scattered across state government reduces financial flexibility. A long term strategy would be to consolidate these programs under one roof, saving money and increasing transparency, and demand that the managers and advocates for these programs devise a long term allocation of funding streams to support energy programs important to Vermonters, with protecting the most vulnerable as the top priority.

    There can be no doubt that with a $15 trillion federal deficit and annual additions in the $1.2 to $1.5 trillion range that a period of federal austerity is before us. This is a fundamental economic reality unless we are to follow the even more painful path of Greece. Rather than remain in a state of denial, hoping that Washington will relieve us of fiscal discomfort, we need, in the best Vermont tradition, do the best with what we got and wait for the federal storm to pass. LIHEAP folks are in no danger of freezing this winter and for winters to come if our leaders and the advocate community stop protecting the status quo and start enacting reforms in state programs including energy, education and human services. Further, Vermont will be far better off when its media takes the more positive tact of reporting on solutions to our problems rather than reveling in scary headlines engendered by a reluctance to embrace reform.

    Also Bob, here is a question back to you. I find your posts sometimes entertaining but often factually handicapped, including your quip that Campaign for Vermont is republican. The simplistic political spin of dividing the world into R’s and D’s and P’s, facts aside, erodes credibility. So here’s a simple true or false question for you to answer. Is it true that the founder of Campaign for Vermont has given campaign donations to Howard Dean, Pat Leahy, Peter Welch, Matt Dune, and Susan Bartlett among many others?

  6. Doug Hoffer :

    Re. Campaign for Vermont

    I checked the records and over the last 20 years, 90% of the money contributed by the founders went to Republicans.

    In the case of Mr. Lisman, the split in 2010 was 87% Republican, 13% Democrat.

  7. There is no money to help people stay warm, and for mobile homes that were damaged due to the flood, and for stabilizing river banks and deepening river beds, and for insulating the housing of lower-income households, but there is plenty of subsidy money being sent to Metro-Gaz of Quebec to do some major blasting on top of Lowell Mountain and elsewhere.
    GMP/Metro have done more damage to the Vermont landscape in a few months than Vermont Yankee will did in 40 years.

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