McHugh Urges President to Release Remaining LIHEAP Funds

by Contributor | July 6, 2008 8:06 pm

Submitted article

Washington, D.C. – Congressman John M. McHugh (NY-Pierrepont Manor) announced today that 50 of his colleagues have joined him in sending a letter to the President urging immediate release of the $120 million remaining in the Low Income Home Energy Assistance Program (LIHEAP) contingency fund.  In addition, Congressman McHugh has continued to lead efforts to fully fund LIHEAP, calling on House leaders to pass increased LIHEAP funding levels for 2008 and 2009.

“State officials across the country have estimated that home heating costs for the 2008-09 winter will reach record levels.  In areas such as the 23rd Congressional District, this will continue to cause a significant hardship for low and middle income families and seniors.  I am committed to bringing some relief to the residents of New York, both by fighting for increased LIHEAP funding and with my legislation that would allow tax relief for families facing high heating costs,” said McHugh.  “Home heating is an absolute necessity in the Northern areas of the nation, and Congress and the President must act to address these soaring costs.”

Congressman McHugh called on the President to release the remaining LIHEAP funds to assist those still reeling from the high energy prices this past winter and those who must pre-buy fuels in an effort to get a head start before the next heating season.  There is a balance of $120 million in the LIHEAP contingency fund.

LIHEAP helps eligible families pay for home heating and cooling in the winter and summer months, as some low-income families, disabled individuals, and senior citizens can spend up to 17 percent of their income on home energy costs. LIHEAP is authorized at $5.1 billion, but in 2008, only $2.6 billion was appropriated for the program.  During the 2007-2008 season, over 55,000 households in the 23rd Congressional District received LIHEAP assistance, for a total of over $32 million in funding.  Home heating estimates for the 2008-2009 winter season are expected to be almost 15 percent higher than this past winter.

Congressman McHugh also introduced H.R. 6321, the Home Energy Affordability Tax Relief (HEATR) Act of 2008.  The HEATR Act would provide up to a $500 tax credit for individuals and families facing more than $1,500 in home heating costs during the winter season, with a maximum of one credit per housing unit.  For homeowners and renters with home heating expenses below $1,500, the bill would provide one-third of the total cost of heating in a tax credit.  Individual tax filers making under $50,000 would be eligible for the credit as well as joint filers making under $100,000.  Above those income levels, the credit would phase out at $60,000 and $110,000 respectively.  Additionally, the credit could be used for a variety of fuel costs, including electricity, natural gas, propane, heating oil, kerosene, wood, and wood pellets.  Congressman McHugh’s legislation is currently being considered by the House Ways and Means Committee.

Text of letter:

Dear Mr. President:

We are writing to urge you to immediately release $120 million available in the Low Income Home Energy Assistance Program (LIHEAP) contingency fund to address the needs of families and seniors across the nation.  Due to the urgency of this crisis, we request that you release funds in no less than two weeks of today’s date.

In some areas of the country, many families are still reeling from the high energy prices from this past winter. In other areas of the country, we have already seen hotter than normal temperatures.  For low-income households, LIHEAP is an important safety net and will save many from making the tough choice between paying their energy bill or putting food on the table.

As you release contingency funds, we urge you to consider several factors: the threat of utility shutoffs for millions of households, families trying to pre-buy energy for the coming winter, continued high energy costs and the lack of leveraging money this year on which states were counting.

Record high energy costs have resulted in record numbers of households facing utility disconnection.  The National Energy Assistance Directors Association (NEADA) estimates that more than 15.6 million households face utility shutoffs because they cannot pay their energy bills.  Shutoff moratoria have run out in the states that have them.  Many families are already experiencing this difficult situation and many more will face this prospect without additional LIHEAP funding.

Additionally, families in cold weather states who were able to pay this winter’s bill are already preparing for next winter and are finding the costs of home heating to be out of reach.  In its most recent Short-Term Energy Outlook, the Energy Information Administration (EIA) predicted that the cost of home heating oil will increase more than 41 percent from the 4th quarter of 2007 to the 4th quarter of 2008.  This increase comes on top of the 162 percent increase in heating oil prices that occurred between January 2000 and March 2008.  Recognizing that prices will continue to rise, many families are trying to be prudent by locking in lower fuel prices.  If prices escalate during the winter, the burden will be even greater.  An influx of LIHEAP money now will help those families plan ahead and be a more efficient use of federal funds.

In the immediate term, already-high energy costs are putting upward pressure on energy rates.  Many utility companies have already or will soon increase their rates.  In Virginia, Dominion Power has applied to raise rates 18 percent; in Missouri, AmerenUE asked for a 12.1 percent increase; in Oklahoma, Public Service Co. implemented a 25 percent increase on June 1; and in New York City, Con Edison expects a 13 percent increase this summer on the heels of a 4.7 percent rate increase in April.

Finally, we encourage you to consider assistance to states that were expecting – but will not receive – funding this fiscal year under the LIHEAP Leveraging Incentive Program.  This program rewards states for supplementing their federal LIHEAP dollars through acquiring non-federal funds.  However, the Department of Health and Human Services determined that the FY2008 Omnibus Appropriations Act (P.L. 110-161) did not authorize them to distribute leveraging grants.  Unfortunately, HHS failed to provide adequate notice of this determination to states.  As a result, states that planned for this money in their budget will be forced to serve fewer households at this critical time.

For all these reasons, we believe that it is of utmost importance that you release all contingency funds now.  Approximately $100 million of the fund will expire at the end of the fiscal year.  The other $20 million in the contingency fund – left over from a FY2005 appropriations bill (P.L. 108-447) – does not expire, but we urge you to release it as well, given the clear need.

Thank you for your consideration of this vital issue.

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