Thursday, July 03, 2008

OTDA to Hold Hearings and Receive Comments on Draft 2008 - 09 HEAP Plan

Under the federal block grant program established by the Low Income Home Energy Assistance Act (LIHEAA), states are given great leeway in design of their programs for meeting home energy needs of low income households. New York is the largest recipient of LIHEAA funds.

New York does not directly supplement the federal grants, and so the State HEAP program closes to applicants when federal funds approach exhaustion. This year, the 2007 - 08 HEAP program closed in May.

The 2008 - 2009 program is expected to open November 1, 2008.The New York State Office of Temporary and Disability Assistance (OTDA) has scheduled public hearings on July 8, 10, and 11 in New York City, Syracuse, and Albany regarding its Draft Plan for the 2008 - 2009 HEAP program. The Draft Plan should be of heightened concern due to the impending high energy prices expected next winter and the effect of those prices on low income households already suffering from serious energy burdens. See Trouble Ahead: Outlook for Home Heating Costs Worsens.

Public participation in development of the plan is a requirement of the federal law. HEAP hearings are typically poorly attended. The new OTDA Draft HEAP Plan, with minor changes, is similar to past plans. It does not, in general, address recommendations made by the public in the needs assessment process for this year's plan.

The OTDA Draft State plan is based on the reduced federal funding level proposed by President Bush. The President's Budget for FY 2009 would reduce the budget for the Low Income Home Energy Assistance Program (LIHEAP) by 22% from $2.57 billion to $2.0 billion by reducing the block grant from $1.98 billion to $1.7 billion and the emergency contingency fund from $590.3 million to $300 million. See Bush Proposes LIHEAP Cuts in 2009 Budget.

In the past, Congress has substantially added to the LIHEAP budget proposals of the President, and then OTDA modifies the plan, without meaningful public input on how the added funds should be spent.

New York received a total of $357.8M in federal LIHEAP funding for the 2007-08 HEAP season, including "formula" funding and discretionary funding releases. New York's share of the $1.98 billion in federal formula funds was $248 million. Thus, in planning only for a federal allocation of $1.7 billion, and assuming the same formula continues, OTDA's Draft Plan only assumes receipt of approximately $212 million, or $145.8 million less than received last year.

While ultimate funding levels are not known yet, it again looks like OTDA will be in a position of allocating a large amount of additional funds with no opportunity for meaningful public input. The Draft Plan deals with additional funds simply by providing a long list from which OTDA chooses to spend the added money, with no priority established in the plan.

In 2007 - 2008 OTDA used added appropriations of $82 million mainly for a second Emergency HEAP payment. This had the effect of supplanting emergency assistance the state otherwise would have paid anyway under another state and locally funded program, and did not increase Regular HEAP grants. As a result, households that struggled to keep up with their payments got nothing more, and new emergencies were a prerequisite to qualify for the added grants. See Needy Households Must Stop Paying Energy Provider to Obtain Supplemental HEAP Benefits.

As in the past, the Draft Plan allows for 15% of the funds to be used for home weatherization, although some of that is retained for administrative and other purposes. On another front, the weatherization program is in jeopardy. See Bush Proposes Elimination of Low Income Home Weatherization Program.

The Draft Plan includes a change in the eligibility standards that will provide a $1 grant to households living in subsidized housing with heat included in their rent. This is a gimmick which will have the effect of making those households eligible for larger amounts of federal Food Stamp assistance. See State Leaders Discuss Looming Home Energy Crisis.

Written comments on the OTDA Draft HEAP Plan are due July 18, 2008.

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