News

Administration’s Budget Calls for Change to LIHEAP Funding

February 1, 2010

The President’s FY 11 Budget for LIHEAP is complex. It would reduce the total core budget from $5.1 billion in FY 10 to $3.3 billion. Of this amount, $2.51 billion would be allocated by formula grant and $790 million would be allocated for emergency funds. In comparison, the FY 10 appropriation provided $4.5 billion in formula grant funds and $590.3 million in emergency funds. The FY 11 Budget would also authorize a new “trigger” provision for LIHEAP that would be similar to the trigger proposed last year but would build in more flexibility. The trigger would provide adjust funding levels upwards in the event of higher energy prices. The President’s Budget set aside $2 billion for the trigger for FY 2011. I am expecting to get details on the trigger shortly. As such, assuming the all trigger and emergency funds were released, then the Budget would provided a total of $5.3 billion, an increase of $200 million over the current year. Details to follow.

The following is the language that was contained in the Budget documents.

LOW INCOME HOME ENERGY ASSISTANCE

For making payments under subsections (b), (d), and (e) of section 2602 of the Low Income Home Energy Assistance Act of 1981, [$5,100,000,000] $3,300,000,000, of which [$4,509,672,000] $2,510,000,000 shall be for payments under subsections (b) and (d) of such section; and of which
[$590,328,000] $790,000,000, to remain available until expended, shall be for payments under subsection (e) of such section, to be made notwithstanding the designation requirements of such subsection: Provided, [That all but $839,792,000 of the amount provided in this Act for subsections (b) and (d) shall be allocated as though the total appropriation for such payments for fiscal year 2010 was less than $1,975,000,000: Provided further,] That notwithstanding section 2605(b)(2)(B)(ii) of such Act, a State may use any amount of an allotment from prior appropriations Acts that is available to that State for providing assistance in fiscal year [2010] 2011, and any allotment from funds appropriated in this Act or any other appropriations Act for fiscal year [2010] 2011, to provide assistance to households whose income does not exceed 75 percent of the State median income. (Department of Health and Human Services Appropriations Act, 2010.)

$2 billion – summary table 8 –page 167

Provides Energy Assistance to Low-Income Families. The Budget includes $3.3 billion for the Low Income Home Energy Assistance Program to help low-income families with their home heating and cooling expenses. In addition, the Administration proposes a new trigger mechanism to provide automatic increases in energy assistance whenever there is a spike in energy costs or large numbers of families in poverty. The trigger allows the program to be more responsive to volatile energy markets and to increased demand for energy assistance during times of economic hardship. Using probabilistic scoring, we expect the trigger to provide roughly $2 billion in additional assistance in 2011 and $6.5 billion over 10 years.

In response to several questions regarding the President’s Budget for LIHEAP for FY 2011, see the following:

1. Does the Budget represent a cut or an increase? The Budget represents a cut in guaranteed funding to states. The Budget would reduce the block grant portion of the appropriation from $4.5 billion in FY 2010 to $2.5 billion. The Budget would increase the amount of emergency contingency funds available from $590.3 million to $790 million. Thus the total amount of “guaranteed” funding under the current program structure would be reduced from $5.1 billion to $3.3 billion.

2. How would the Budget increase funding? The Budget also calls for a “trigger” that would release additional funds in the event of an increase in energy prices or Food Stamp recipients. The Administration has estimated that the trigger would result in approximately $2 billion being released in FY 2011, thus, resulting in a net increase in LIHEAP funding from $5.1 billion in FY 2010 to $5.3 billion in FY 2011.

3. Does the provision have to be approved by an authorizing committee or can appropriations include it separately? At this point it’s not clear. I am awaiting further clarification.

Contact: Mark Wolfe, Executive Director, NEADA, 202-237-5199, mlwolfe@neada.org.