State lawmakers Wednesday rejected Gov. M. Jodi Rell’s proposal to curtail heating and energy assistance in response to shrinking federal funding, potentially opening a $46 million hole in the state budget.

The Appropriations, Human Services and Energy and Technology committees all voted overwhelmingly against the administration’s plan to impose new limits on eligibility and benefits provided under the Low Income Home Energy Assistance Program after hearing projections that 18,800 fewer households would receive aid under this plan.

“We understand that the administration is trying to be prudent,” Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, said afterward. “But there are so many intangibles at this point and we’re very concerned about the thousands of families out there that need this help.”

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Rep. Matthew Lesser: ‘This seems to happen every year’

A record-setting 82,956 households received help paying their heating and other energy bills last winter, according to administration statistics. Department of Social Services Deputy Commissioner Claudette Beaulieu testified that participation had risen 5.5 percent last year after jumping 24 percent two winters ago.

But Beaulieu and Office of Policy and Management Secretary Brenda Sisco, the governor’s budget director, also warned that based on federal funding levels proposed by President Obama and by congressional committees, Connecticut was facing a 45.6 percent drop in base federal block grant funding for LIHEAP.

That would mean $44.2 million less for the program, and DSS projected that continuing assistance under existing rules would empty the energy aid fund by the first week in January.

Although about 90 percent of the program funds are used to help pay the heating and energy bills of low-income families, but LIHEAP also pays for furnace inspections and repair and a supplemental nutrition assistance service for poor households struggling to pay their energy bills.

“I have to tell you, there are no good options when you are facing a 45 percent reduction,” Beaulieu told lawmakers. “We’re doing this to maintain benefits for people who have the least ability to pay.”

The Rell administration proposed a $72 million LIHEAP budget for this winter, down $46 million from last winter’s $118.3 million program. The administration package included a $52.7 million block grant, $8.8 million in likely supplemental, mid-winter federal aid, and $10.6 million in state funding carried forward from last fiscal year to support the program.

To deal with that $46 million overall reduction, and particularly $44 million less in federal aid, administration officials recommended both tougher eligibility restrictions and new benefit limitations

Last winter, households with earnings less than 60 percent of the state median income — $60,986 for a family of four – were eligible. The new plan set the limit at 200 percent of the federal poverty level, or $44,100 for that same family of four.

Both the Rell administration and the legislature’s nonpartisan Office of Fiscal Analysis projected that change would reduce participation by 18,800 households this winter.

Most recipients of home energy assistance in Connecticut last year received grants ranging between $580 and $880 for the season. The administration wanted to reduce the basic benefit range this winter to $275-$675.

“We clearly recognize that these benefit levels are lower,” Sisco said. “The plan before you today is reasonable and balanced in light of the federal reductions.”

Funding plans for social service programs that rely heavily on federal block grants follow a different process than normal state budget adoption procedures.

According to state law, the governor must submit a plan for consideration by those legislative committees with program oversight. In this case, that means the Appropriations, Human Services, and Energy and Technology committees.

While those panels can modify the governor’s plans, they cannot unilaterally authorize more funding.

Both majority Democrats and most of the Republican minority on all three committees weren’t ready to pull the plug on the existing eligibility rules or benefit structure, even if it leaves a big fiscal question mark. The administration plan was rejected by votes of 25-2 in Appropriations, 9-1 in Human Services and 11-0 in Energy and Technology.

Both Rep. Matthew Lesser, D-Middletown, who serves on Energy and Technology, and members of the private, nonprofit social services community, challenged the Rell administration’s forecast of a major drop in federal aid.

“This seems to happen every year,” Lesser said, citing correspondence from several congressional delegations that larger program budgets are likely to be proposed.

“I’m totally perplexed by these estimates,” said Shirley Begert, an attorney and energy assistance specialist with Connecticut Legal Services Inc., who added that dismal state government forecasts for energy assistance have become the latest annual “political football.”

A spokesman for the governor’s office could not be reached after the committees finished their votes early Wednesday evening.

Rep. Clark Chapin, R-New Milford, a member of the Human Services Committee, said he recognizes that after the huge emergency stimulus program of 2009 and 2010, federal aid to states may be on the decline. “But I doubt the people (in the assistance program last year) are in any better fiscal shape,” he added. “They needed the money last year. They need it this year.”

Rep. Craig Miner of Litchfield, ranking House Republican on the Appropriations Committee, was one of the few lawmakers to both support the governor’s plan and publicly criticize his colleagues, charging that state election year politicking led many to effectively make it promise that state government can’t afford.

Predicting that lawmakers won’t be ready to shut down assistance if federal funding does run short and the program runs dry in early January, Miner said this year’s state budget, which already stands $45 million in deficit, will have another hole to fill.

“We are, de facto, setting people up for a real big problem in January,” he said. “We’re saying ‘Congress and the president are going to change… Don’t worry folks, Washington is going to print more money.’”

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Keith M. PhaneufState Budget Reporter

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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