Letter to the Honorable Robert C. Byrd, Chairman and the Honorable Thad Cochran, Ranking Member of the Senate Committee on Appropriations

Letter

Kyl Urges Reform of LIHEAP Funding Formula to Aid Hot-Weather States

U.S. Senator Jon Kyl (R-Ariz.) today sent a letter to the Chairman and Ranking Republican of the Senate Appropriations Committee urging Congress to reform the Low Income Home Energy Assistance Program (LIHEAP) funding formula so that assistance is distributed more equitably before additional funds are added to the program.

LIHEAP funds help provide assistance to low-income residents who face difficulty paying their utility bills - a clear concern in cold-weather states, but also is a critical concern in the summer when hot-weather states endure extremely high temperatures. The formula used to distribute LIHEAP funds, however, severely shortchanges hot-weather states such as Arizona, in most circumstances.

In fact, in the 2005 fiscal year, less than three percent of all LIHEAP funds were spent on cooling assistance.

Kyl's letter was co-signed by eight other senators, including John Ensign (R-Nev.), Pete Domenici (R-N.M.), Johnny Isakson (R-Ga.), Elizabeth Dole (R-N.C.), Kay Bailey Hutchison (R-Texas), Roger Wicker (R-Miss.), Saxby Chambliss (R-Ga.), and Mel Martinez (R-Fla.).

The text of the letter is attached below.

September 12, 2008

The Honorable Robert C. Byrd
Chairman
Committee on Appropriations
United States Senate
Washington, DC 20510

The Honorable Thad Cochran
Ranking Member
Committee on Appropriations
United States Senate
Washington, DC 20510

Dear Chairman Byrd and Ranking Member Cochran:

The Low Income Home Energy Assistance Program (LIHEAP) was established in 1981 to help low-income families pay for rising energy costs. Despite the program's intent to assist all low-income families, LIHEAP funds are overwhelmingly distributed to families in cold weather states at the expense of those who face high cooling costs in hot weather states. In FY2005, the most recent year for which data are available, approximately 55.2 percent of all LIHEAP funds were used to provide heating assistance and only 2.8 percent of the funds were used for cooling assistance (the remaining funds were used for weatherization, crisis assistance, and administration and planning purposes). As Congress considers additional LIHEAP funding, we would like to highlight the many inequities associated with the distribution of LIHEAP money, and strongly urge you to amend the program to benefit all states.

As you know, LIHEAP funding is divided between the formula fund, which is allocated to the states based on a statutory formula, and the contingency fund, which is distributed to one or more states based on emergencies. The formula fund is distributed to states according to a three-tier formula based on the level of funds appropriated in a given fiscal year. If the total LIHEAP regular fund appropriation is less than $1.975 billion, then the Tier I formula is used. Under the Tier I formula, money is distributed based on the 1980 census, and does not take into account the recent population shift to hot weather states. As a result, allotments made to the states under the Tier I formula largely favor home heating needs with minimal consideration of cooling costs. For example, in FY2008, Arizona received $8 million less than New Hampshire; Texas received $205 million less than New York; and Florida received $14 million less than Connecticut. These hot weather states are more populous than the cold weather states, yet, the Tier I formula clearly disadvantages these largely populated hot weather states.

Hot weather states do achieve parity with cold weather states when the LIHEAP funding level surpasses $1.975 billion and the more equitable Tier II and Tier III funding formulas are applied. However, until FY2006, funding levels for LIHEAP only twice exceeded the $1.975 billion level. We believe that the LIHEAP Tier I formula should be amended to reflect the most recent census data to ensure that LIHEAP funding is equitably disbursed to low-income residents of all states who are fighting the rising costs of energy.

Like the formula fund, the contingency fund is also overwhelmingly distributed to cold weather states. In FY2008, the Administration released LIHEAP contingency funds on two different occasions. The first distribution occurred on January 16, 2008 when over $300 million of the $450 million distributed went to cold weather states to assist low-income households meet heating costs. The remaining $150 million was distributed to all states based on the Tier I funding formula, which heavily favors states with high heating costs. The second LIHEAP contingency fund distribution occurred on February 16, 2008 when the Administration released $40 million to 11 cold weather states. In FY2008 and previous years, contingency funds were overwhelmingly distributed to cold weather states despite extreme heat causing health and safety hazards in parts of our states. To ensure equitable distribution of the contingency funds, we encourage you to authorize that any funding provided to the LIHEAP contingency fund be split 50/50 between cold weather states and hot weather states.

It is important to note that the National Weather Service released a report citing that in 2006, 253 people died as a result of extreme heat, up from 158 fatalities in 2005. That year, 135 deaths occurred in permanent homes with little or no air conditioning. The majority of the victims were over the age of 50. According to the Center for Disease Control and Prevention, air conditioning is the number one protective factor against heat-related illness and death. The ability of people to cool their homes is clearly a life or death issue, and we hope that Congress will not ignore the severity of this matter.

While we believe that our suggestions would help balance LIHEAP funding, we are open to other suggestions to distribute LIHEAP money more fairly. We ask that should Congress appropriate additional funds to LIHEAP, it not do so without addressing the funding disparity that endangers low-income residents in hot weather states. Thank you for your attention to this important matter.

Sincerely,

Jon Kyl
John Ensign
Pete Domenici
Johnny Isakson
Elizabeth Dole
Kay Bailey Hutchison
Roger Wicker
Saxby Chambliss
Mel Martinez

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