On November 9, 2022

After a windfall year, federal funding for heating assistance recedes as oil prices rise

By Emma Cotton/VTDigger

Last year, Vermont received an unprecedented $49 million in federal funding to help Vermonters with low incomes pay their heating bills — a windfall that officials knew the state wouldn’t likely see again.

“We certainly had a largess with the [American Rescue Plan Act] funding, and that was certainly a once-in-a-lifetime opportunity for Vermont,” Sean Brown, the outgoing commissioner of the Vermont Dept.for Children and Families, said at Gov. Phil Scott’s press briefing last week.

This year, the need will likely be greater than last, as inflation sends the cost of fuel oil soaring. But without the Covid-era windfall, the federal dollars will fall back down — to about $27 million — distressing advocates.

“People with very low incomes, particularly those with fixed incomes, are in a more serious situation than they’ve been in for several years, and it’s very, very worrisome,” said Sue Minter, executive director of Capstone Community Action in Barre. “It’s much more severe than before the pandemic because of the inflation.”

Fuel heating prices are expected to rise this winter, and inflation has continued to squeeze many families’ budgets. Prices for residential heating oil, for example, were around $5 per gallon on Oct. 10, up from $4.54 a week earlier, according to the U.S. Energy Information Administration.

A year ago, the price for residential heating oil was $3.37, and that’s up from $2.14 during the same month in 2020.

In addition, other supports that have come online during the pandemic, such as rental assistance, are set to expire.

Since last winter, staff at Capstone have seen a 35% increase in the number of people who need emergency food, “and that’s before their heating bills show up,” Minter said.

“There are many, many supports for critical services for very low-income people that are being eroded at the same time, and with the concurring incredible inflationary escalation,” she said. “So it is a very tough view from where we sit.”

Prior to the pandemic, Vermont typically received around $21 million each year from the federal government for the Low Income Home Energy Assistance Program, better known as LIHEAP. This year, the state will get an additional $5.7 million after U.S. Sen. Patrick Leahy, D-Vt., secured an extra $1 billion for the program overall.

It’s possible that extra funding will mean Vermont won’t have to pull from the state’s budget, Brown said.

The extra $5.7 million “certainly goes a long way, because we were anticipating an additional need,” he said, adding that the governor had approved additional state funds as a contingency.

Minter, who is doubtful the funding will cover Vermonters’ needs, said she’s prepared to ask state lawmakers to allocate extra money.

“What I’m seeing in my door, from what’s happening at the phones, from what I know about what our needs were a year ago — knowing that we’re getting half of what we did a year ago — I really don’t think the needs of Vermonters are going to be met, for those most in need,” she said.

In response to inflation, the federal government adjusted this year’s income eligibility guidelines for LIHEAP, but the change is small. For example, the monthly income limit for a single Vermonter was raised from $1,985 to $2,096.

Because money for LIHEAP comes to the state as one block grant, the amount distributed to households depends on the number of people who need it.

“If we have more households apply — let’s just say, you know, 5,000 more households applied and were found eligible — we’d have the same pot of money, we would just have to distribute it to more households,” said Richard Giddings, director of the state’s heating and utility assistance programs for the Dept. for Children and Families.

While the amount of money families receive from LIHEAP depends on a number of factors, Giddings said, there’s less to go around this year.

Considering the price of fuel, Giddings expects to “have more households that are applying, just to help supplement getting through the winter.”

There are some other ways to address the heating needs of Vermonters, Minter said. Capstone, which serves about 13,000 people in central Vermont, holds fundraisers and asks for donations. Incentives are available for home weatherization projects, which can significantly reduce heating costs.

Still, the rising costs of living and reduced federal funding put Vermont “in a challenging spot,” Giddings said.

“We won’t get back to the $49 million mark,” he said. “So we will have to think creatively about how folks are best served.”

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