Social service advocates are urging legislators to commit state money to make up for a potential shortfall in federal funding to help low-income residents to heat their homes this winter, an alternative to a plan by the Malloy administration that would leave to more than 80,000 poor households without the assistance.
But Gov. Dannel P. Malloy’s budget director said committing state funds isn’t an option now, and lawmakers who will vote on a plan for the energy assistance program next week said using state money will be a challenge.
“I don’t think anyone wants to talk about increasing spending or taxes unless we literally fail every other way,” said Sen. Anthony Musto, D-Trumbull, co-chair of the Human Services Committee.
The administration’s plan would provide funding for households heated by so-called deliverable fuels–oil, propane, wood or coal–but provide none for those heated by gas or electricity unless additional federal money becomes available. The reasoning is that state law protects low-income utility customers from losing service for nonpayment between Nov. 1 and May 1. Deliverable fuel customers get no such protection.
Musto, who called the administration’s proposal practical and creative but raised concerns about its effect on those who use utilities for heat, said finding efficiencies in the budget would be preferable to spending additional money. But whatever the decision is, he said, it’s a matter of life and death.
“This is actually a life-threatening situation, especially for the very young, the very old and the sick,” he said. “If we can’t keep these people warm over the winter, we are going to have people die.”
Advocates, meanwhile, said that while utility customers won’t have their heat cut off, losing help paying for it could pose a significant problem.
“For a lot of families, things are already stretched very thin and this could be the straw that breaks things and causes an eviction or some other kind of crisis-precipitating event,” said Liz Dupont-Diehl, policy director for the Connecticut Association for Human Services. “We have to think ahead, what it means to shred the safety net like this.”
The current quandary stems from an expected cut in federal funding for the Low Income Home Energy Assistance Program, or LIHEAP. Last year, the state used $115 million in federal funds to provide aid to more than 117,000 households.
It’s not clear how much the federal government will provide this year, but officials expect it to be significantly less; even before the recent Congressional focus on cutting spending, President Obama recommended slashing LIHEAP funding. The Malloy administration’s plan is based on a projection that the state will get $46.4 million, and would serve an estimated 36,826 households. Malloy and other governors have appealed to Congressional leaders for more funds, but administration officials have said it would not be responsible to count on more money.
The plan requires legislative approval and will be the subject of a public hearing Tuesday at 3 p.m., at the Legislative Office Building in Hartford.
Critics of the proposal include the state Office of Consumer Counsel, which advocates for utility rate payers and wants the plan revised to provide benefits for people who get their heat from utilities. If people who don’t get assistance can’t pay their bills, it will shift costs to the other utility customers, said Joe Rosenthal, the office’s principal attorney.
The Low Income Energy Advisory Board, which oversees the program, also has called for an alternative, in which the money is spread over everyone who qualifies, regardless of heat source.
Office of Policy and Management Secretary Benjamin Barnes, Malloy’s budget director, said the problem with that approach is that it would leave oil customers without enough money for even one delivery, since oil deliveries require a minimum of 100 gallons.
But he said Wednesday that the administration will present a variation to lawmakers that would provide some funding to all customers who qualify, regardless of how their homes are heated. He cautioned that it could leave people in danger of running out of resources for fuel. Under that option, the benefit households with deliverable fuel get would cover about 40 percent of the average demand for fuel. The administration’s plan would cover 60 percent, Barnes said, while last year’s program covered more than 80 percent.
Barnes called the administration’s plan a “no-freeze approach” that can be maintained through the winter, and said committing state funds to the program now is not an option. Any need for state funding can be addressed in February or March, when the legislature is in session and officials have a better idea of how much money the federal government will provide and how severe the winter was, he said.
“If at that point there’s a critical need for the state to come to the table, we’ll be happy to have that conversation with the legislature at that time,” he said.
This year’s $20.14 billion budget, Malloy’s first as governor, leaves little flexibility. The budget relies on aggressive savings targets, including $700 million related to a labor concession deal, so savings that could in other years be put toward energy assistance are likely to be needed to balance the budget. The budget is also only about $1 million below the spending cap. Previous administrations have sought legislative permission to exceed the cap, and advocates for low-income residents want Malloy to do the same.
House Majority Leader J. Brendan Sharkey, D-Hamden, said spending beyond the cap should be a last resort to use only if offsetting state spending cuts, or additional aid from the federal government or private utilities, can’t be identified.
Still, he said, “I don’t think we can turn our backs on elderly and disadvantaged folks who need the state’s help.”
Human Services Committee Co-Chair Rep. Peter Tercyak, D-New Britain, said he is concerned about how people with gas or electric heat would fare under the administration’s plan.
“We’re encouraging them to run up bills that they will never, ever be able to pay,” he said. “They will never have a utility turned on in their name for the next five or 10 years.”
Still, with little confidence in Congress providing more money, Tercyak said there were no good options.
“Any way you look at it, it’s horrible,” he said.
Rep. Vickie O. Nardello, D-Prospect, co-chair of the Energy and Technology Committee, said she would prefer that all customers who qualify, regardless of heat source, get some assistance. She called the administration’s projection of the federal funding “very conservative,” and said she thinks Connecticut will get more.
As for committing state money to the program if the federal government doesn’t provide more, Nardello said, “I think at this point we’ve already allocated for this budget year, so it becomes difficult, unless we identify funds that were either not used in another area or there’s additional revenue that comes in that we didn’t expect.”
Senate Majority Leader Martin M. Looney, D-New Haven, said it’s too soon to say how the legislature and the governor will resolve the potential funding shortfall, but he believes that ultimately, public health and safety concerns have to trump any fiscal goals.
“For me, the priority would be making sure people don’t freeze to death this winter,” he said.
Raphael Podolsky, an attorney with the Legal Assistance Resource Center of Connecticut, said leaving utility customers with no benefits now and waiting several months before potentially putting state money into the program is problematic. People who would not be slated to get any funding would be unlikely to apply for the program, making it more difficult for them to get funding it if becomes available in a few months.
Leaders of community action agencies, which handle eligibility for the program, are also concerned about the funding cut. Their funding is based on the total LIHEAP funding, and they could receive less than half what they got last year to hire staff to handle applications. Although many fewer people would qualify for LIHEAP funding under the administration’s plan, eligibility for LIHEAP is also used to determine eligibility for a matching payment program in which utilities allow customers to pay off their debts.
“Medical research shows that people freeze before they starve to death,” said Edith Pollock Karsky, executive director of the Connecticut Association for Community Action. “It’s a downward spiral, no matter how you look at it.”
Barnes said the arguments about utility customers having to pay huge bills or lose power in May ignores the matching payment program and the willingness of utility companies to help solve the problems. He is meeting with the utility companies this week.
Mitch Gross, a spokesman for Connecticut Light and Power, said the company will discuss the changes with the governor’s office and other state officials. “A lot of discussions need to be held regarding this issue,” he said, adding that the company has been receiving questions from customers wondering how they will be affected.
Ashley Duncan, a spokeswoman for Yankee Gas, said the company is concerned about its customers being unable to access LIHEAP funding. “Given the economy now, there’s an even bigger pool of people in need and so customers have been finding it difficult to stay current with their bills, with or without this funding,” she said, adding that people should call the company as soon as they have trouble staying current on a bill.
Barnes noted that in March or April, most people eligible for the heating assistance will receive an earned income tax credit, a new program Malloy proposed. The credit is available to low-income people with at least $1 in earned income in the past year. It’s not available to people who relied solely on Social Security, pensions or unemployment.
Dupont-Diehl acknowledged the administration’s efforts to “keep a good deal of the safety net intact.”
“People see that and people recognize that,” she said. “But in this case, the families that we’re talking about are going to suffer real crisis and real harm as a result of this in ways that it’s going to cost the state money later.”
Jacqueline Rabe contributed to this story