Author: Andrea Glaessner
For the second winter in a row, the Vermont state legislature will be forced to use state funds to provide heating cost assistance for low-income families. American consumers from all income brackets are forking over more money than ever to pay for fuel and - in colder parts of the nation - for heating bills this winter.
While oil companies are reveling in their record-breaking profits, low-income individuals are especially fraught trying to make ends meet in an economy increasingly monopolized by what some consider to be artificially high fuel costs.
In the past, the Economic Services Division of the Vermont State Agency of Human Services' seasonal fuel assistance program offered to low-income residents solely relied on federal funds. But with last year's increased fuel costs, federal aid was just not enough to make a difference on the heating bill, and the state drew $1 million from state funds, marking the first time that the legislature added state resources to insufficient federal funds.
With fuel prices even higher this year, the state will have to contribute more than $1 million to supplement federal aid. According to the Chair of the Senate Appropriations Committee Susan Bartlett, "The financial implications of high fuel prices are huge for Vermont's low income population. Too many Vermonters are now facing choices between heat, food and health care." The heating season runs from October to March and given the early snow that hit Vermont in mid-October, individuals need money made available immediately to pay the heating bills.
Effective as of Nov. 1, the Emergency Board of the Vermont State Legislature enacted a plan to withdraw $7 million from state funds to supplement federal aid for fuel assistance. The $7 million will come from a variety of sources: $3.5 million will come out of the Home Weatherization Assistance Trust Fund and the other $3.5 million will come out of general appropriation funds that will be rectified in the budget adjustment at the beginning of the next legislative session.
The $7 million in state funds will supplement the federal government's Low Income Home Energy Assistance Program (LIHEAP). The combined state and federal funds will enable eligible low-income Vermonters to receive home heating assistance at roughly 62 percent of the average winter bill.
Unfortunately, "even this will be tough for families," said Senator Ann Cummings, chair of the Senate Finance Committee. "The remaining heating fuel a recipient will have to buy is projected to cost 35 percent more than last year. This increase will come out of [low-income] Vermonters' pockets." While the Vermont state government is actively gathering funds to send out to low-income residents, the federal government, who traditionally holds this responsibility through LIHEAP, has done little to increase aid despite the severity of the issue this particular winter.
Maria Belliveau, associate fiscal officer in the House of Appropriations of the Vermont state legislature explains that, "Every year LIHEAP gives the state two pieces of money - a basic block grant and contingency funds that are different every year depending on severity of year. The funds are still in the process of negotiation, though we anticipate a $10.8 million basic block grant and hope for $3.2 million in contingency funds. But who knows if that will really happen." Last year Vermont received $2.7 million in contingency funds and they expect this year they may receive $3.2 million, only a slight increase from the previous year.
But Vermont is not alone in this struggle to raise funds for low-income residents. States across the nation are experiencing similar difficulties from a lack of federal funding support. For the winter of 2005, Congress appropriated $2.2 billion, which would cover only 15 percent of the 35 million households nationwide that could benefit from LIHEAP.
According to a press release from Vice-Chair on the Senate Committee on Finance of the Vermont state legislature Peter Welch: "In a pattern that has shown itself repeatedly during the Bush administration, states like Vermont are left with the burden of cutting important programs or imposing on already over stretched state taxpayers. Vermont has already had to deal with federal shortfalls in funding for Medicaid, No Child Left Behind and Special Education, among others."
Welch, a Democratic candidate for the United States Congress recognizes the direct connection between the oil companies increased profits and the increased fuel costs, and believes the oil companies should share some of the burden. As noted in a press release from Welch's office, "In the past three years, as the price of a barrel of oil has skyrocketed to $60, the major oil companies have enjoyed profits of $125 billion. Meanwhile, these same companies have received billions of dollars in taxpayer subsidies."
In what he calls a "common sense, relatively painless solution" to the problem of insufficient federal aid faced by the states, Welch has called on Congressional leaders to support a $1-per-barrel windfall profits tax on oil companies that would fund the minimum needs of LIHEAP nationally if implemented for just 64 days.
Welch's proposal is supported by statistical evidence. Given that Americans consume 20,000,000 barrels of oil per day, in 64 days a windfall profits tax would raise over $1.2 billion, bringing LIHEAP funding from $2.2 billion to $3.4 billion. According to Welch, this solution "would alleviate an enormous amount of suffering and inflict no pain on oil companies reaping record profits."
After Welch's proposal last week for a temporary windfall profits tax on oil companies to fully fund the LIHEAP program, many Congressional representatives, both Democrats and Republicans, have been making efforts to implement the idea. According to a recent press release, "Since then Budget Committee Chairman Senator Judd Gregg (R-NH) has called for a windfall profits tax and Finance Committee Chairman Senator Charles Grassley (R-IA) wrote a scathing letter to the oil industry urging them to donate 10 percent of their growing profits to LIHEAP."
But despite widespread agreement between both parties in Congress, the Bush administration has soundly rejected the idea of taxing the oil companies treated with such a "VIP" status by the current administration. Reuters reports that "the Bush administration opposes a Republican request that oil companies donate some of their record profits to a federal fund to help poor Americans pay winter heating bills because it sounds too much like a tax."
To confirm this sentiment, according to a press release, Energy Secretary Sam Bodman expressed the Bush administration's opposition to asking for any donation to LIHEAP from oil companies saying, "No sir. I wouldn't support it. It is similar to a tax."
In response to Bodman, who speaks on behalf of the Bush administration, Welch expressed disconcertingly that, "Republican leadership has demonstrated clear support for the oil industry. But where is their support for our most vulnerable citizens when they need help? Strong leaders aren't afraid to ask those who have benefited much to give a little back."
Although Welch's solution would release the burden on the states for the future, it is unable to meet the needs of Vermonters this winter. The states must continue to search for funds until Congress steps up against the Bush administration to resolve this unquestionably dire situation.
Fuel costs put the heat on state aid
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