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2005 Policy Positions
of the Southern Legislative Conference

7.  POLICY POSITION IN SUPPORT OF REFORM AND FULL FUNDING OF THE FEDERAL LOW INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP)


BACKGROUND

The Southern Legislative Conference, Southern Governors’ Association (SGA) and the Southern States Energy Board (SSEB) have longstanding shared interests in the Federal Low Income Home Energy Assistance Program (LIHEAP).  LIHEAP was created to assist low-income households in meeting their home energy needs, and to protect the health and safety of citizens living throughout the United States.  LIHEAP is insufficiently funded, currently providing assistance to less than 15 percent of eligible Americans.  Additionally, low-income working poor and fixed-income elderly Americans are now confronting significantly higher energy bills due to stubbornly high natural gas prices.  These consumers already pay a much higher proportion of household income for energy costs than do average consumers.  Thus, high energy prices hit low-income Americans disproportionately harder. As presently configured, LIHEAP compounds this problem by utilizing an outdated formula weighted toward cold weather regions, which places undue emphasis upon heating, effectively penalizing warm weather climes. 

Deaths and injuries from extreme hot weather can easily exceed mortality and injuries attributable to extreme cold.  For example, heat resulted in almost 20 times more deaths than extreme cold between 1998 and 2000 in the United States.  Home cooling protects against heat-related deaths and injuries.  However, this safeguard often is unaffordable because the energy burden of cooling the homes of our neediest eligible residents approaches 30 percent of their total household income

LIHEAP’s outdated formula is utilized when the program’s national appropriations are below $1.975 billion and relies upon population, energy consumption and price statistics from the 1930s to the early 1980s.   

A better methodology exists within LIHEAP’s “new” formula, which guides the distribution of appropriated federal funds above $1.975 billion.  The “new” formula utilizes the latest state-specific population, income and energy price statistics, and accommodates price anomalies that the outdated formula ignores.  Federal LIHEAP appropriations have averaged $1.5 billion over the past 23 years. The current $1.975 billion trigger is almost never reached.  As a result, the “new” formula has been activated only twice since the program’s inception.  To meaningfully benefit the SLC states, and our nation, this threshold must not merely be met – it must be substantially exceeded.  LIHEAP can be re-energized to provide equitable funding for Southern states by either significantly increasing funding and/or realistically adjusting the program’s trigger point to activate the “new” formula.  One way to do this is to combine LIHEAP’s base State and Emergency Grant programs, while at least holding federal appropriations at their FY 2005 level.  Such a move would represent a good-faith step in the right direction, toward a more substantial federal commitment to the entire nation, while in the interim, not exacerbating the federal deficit.  This also would allow states to better administer their LIHEAP programs, as it would eliminate substantial uncertainties associated with the present Emergency Grant program. 

RECOMMENDATION

The Southern Legislative Conference of The Council of State Governments joins SGA, SSEB and others in urging Congress and the president to pursue improvements to ensure that today’s neediest, eligible Americans are truly helped to meet their home energy needs by:

  • Significantly increasing LIHEAP appropriations to ensure continuous use of the “new” formula, thereby utilizing the latest energy price and poverty population data available rather than outdated information that is increasingly irrelevant; 
  • Adding to LIHEAP’s base State Grants funding previously allocated to Emergency Grants to ensure that the “new” formula is continuously in force.  This also would enable states to know exactly what funding they will have each year and to more effectively disburse these funds;
  • Reforming the trigger mechanism or altering the formula in order to achieve a more equitable distribution of resources; and
  • Increasing funding for LIHEAP’s companion federal Weatherization Assistance Program in order to permanently cut energy consumption, energy bills and pollution alike, and achieve significant long-term structural reform and energy efficiencies.

Furthermore, the Southern Legislative Conference of The Council of State Governments urges that copies of this policy position be forwarded to the president of the United States; the appropriate leaders of the U.S. Senate and House of Representatives; members of the Southern congressional delegation; secretaries of the U. S. Departments of Energy and Health & Human Services; and the governors of the 16 member states of the SLC.

 

Adopted by the Southern Legislative Conference, August 2, 2005, Mobile, Alabama

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