After bumper year, federal funding for heating assistance shrinks as oil prices rise

Last year, Vermont received an unprecedented $49 million in federal funding to help low-income Vermonters pay their heating bills — a boon officials knew the state was unlikely to see again.

“We certainly had largesse with the funding (American Rescue Plan Act), and it was definitely a unique opportunity for Vermont,” said Sean Brown, the outgoing commissioner of the Vermont Department for Children and Families. Press briefing from Governor Phil Scott last week.

This year, the needs are likely to be greater than last year, as inflation is driving up the price of fuel oil. But without the Covid-era windfall, federal dollars will fall — to around $27 million — from distressing defenders.

“People on very low incomes, especially those on fixed incomes, are in worse shape than they have been in several years, and that’s very, very concerning,” said Sue Minter, executive director of Capstone Community Action in Barre. “It’s much worse than before the pandemic because of inflation.”

Heating prices are expected to rise this winter and inflation has continued to weigh on the budgets of many families. Home heating oil prices, for example, were around $5 a gallon on Oct. 10, down from $4.54 the previous week, according to the US Energy Information Administration.

A year ago, the price of home heating oil was $3.37, down from $2.14 in the same month in 2020.

Additionally, other aids that have come online during the pandemic, such as rental assistance, are about to expire.

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

“There are so many supports for essential services for people on very low incomes that are eroding at the same time, and with the incredible attendant inflationary escalation,” she said. “So it’s a very difficult view from where we’re sitting.”

Before the pandemic, Vermont typically received about $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 receive an additional $5.7 million after U.S. Sen. Patrick Leahy, D-Vt., secured an additional $1 billion for the entire program.

It’s possible that additional funding means Vermont won’t have to dip into the state budget, Brown said.

The additional $5.7 million “certainly goes a long way, as we anticipated an additional need,” he said, adding that the governor had approved additional public emergency funding.

Minter, who doubts the funding will cover the needs of Vermonters, said she’s open to asking state lawmakers to allocate additional funds.

“What I see on my doorstep, from what’s on the phone, from what I know of our needs a year ago – knowing that we’re getting half of what we did a year ago one year – I really don’t think Vermonters’ needs are going to be met, for those who need it the most,” she said.

In response to inflation, the federal government has adjusted this year’s income eligibility guidelines for LIHEAP, but the change is minimal. For example, the monthly income limit for a single person in Vermont has been increased from $1,985 to $2,096.

Since the money for LIHEAP is paid to the state in the form of a block grant, the amount distributed to households depends on the number of people in need.

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

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

Given the price of fuel, Giddings expects “to have more households applying, just to help get through the winter”.

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

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

“We’re not going back to the $49 million mark,” he said. “So we will have to think creatively about how best to serve people.”

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