Testimony of Angie Rodgers, Policy Analyst, DC Fiscal Policy Institute, At The Agency Oversight Hearing On the Fiscal Year 2006 Budget For The DC Energy Office District of Columbia Committee On Economic Development

Chairperson Ambrose, other members of the Committee, thank you for the opportunity to speak today.  My name is Angie Rodgers, and I am a policy analyst at the DC Fiscal Policy Institute.  DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low? and moderate?income residents.

My testimony today supports the work of the Low Income Home Energy Assistance Program (LIHEAP) run by the DC Energy Office.  Each year, LIHEAP assists thousands of extremely low-income District households, those earning less than 150 percent of the poverty line ‘ about $24,000 for a family of three.  Without LIHEAP, the majority of these families would face keeping their homes at unsafe temperatures or face interruptions of service altogether.  LIHEAP fills a critical gap in the lives of the families it serves.  Research indicates that when families face increasing utility costs, they often reduce spending on food and other necessities in order to cover their utility bills.  It is clear, however, that based on the rapid increases in energy costs, LIHEAP needs additional resources to assist those who come to them for help.

The Center on Budget and Policy Priorities has estimated that the District needs an additional $7.7 million above its FY 2005 funding level to address the rising utility costs for existing energy assistance recipients plus a conservatively estimated 10 percent increase in clients.  Unfortunately, Congressional efforts to increase federal energy assistance have failed thus far.  The DC Fiscal Policy Institute, along with the Fair Budget Coalition and the Affordable Housing Alliance recommends that the District take steps to identify $10 million in additional energy assistance funding to provide relief to low-income residents facing increasing utility bills in both the current and upcoming fiscal years.  Energy prices are rising by as much as one-third this year and the program faces a number of other challenges, including a large eligible population and funding challenges that preceded this year’s boom in energy prices.

In FY 2005, the program served some 22,000 households.  There are, however, some 56,000 households in the District who are eligible for the program.  Obviously, all of these families do not seek help from LIHEAP, but many of them do.  In fact, the program has seen a 27 percent increase in the number of families seeking assistance this year compared to last.  LIHEAP could use additional funds to serve more families.

The eligibility threshold for LIHEAP is very low ‘ 50 percent of poverty.  Many families who are just above the threshold are also very needy but cannot receive assistance.  We would support raising the eligibility threshold to at least 175 percent of the poverty line.

For families who are just under the eligibility threshold, the benefit level is very low.  A family of three with income at the poverty line would be eligible for a maximum benefit of just $218. A family of three with income just under the eligibility threshold of 150 percent of poverty would qualify a benefit of only $80.  LIHEAP could use additional funds to increase benefit levels, particularly for these types of families.

Finally, LIHEAP ran out of funds just three months into the last fiscal year and, were it not for the portion of this year’s TANF bonus that they received, they likely would have had to close their doors early again this year.  When the program runs out of funds and closes, they are not only unable to help families with winter heating bills; they are also not around to assist with summer cooling bills.

Each month, thousands all over the city seek help from LIHEAP and other programs that help poor families meet the growing cost of living.  All of these programs, including LIHEAP, face overwhelming need.  They have minimal resources and only a fraction of the families in need actually receive aid.  The District needs to take a number of steps to mend the growing gap in its safety net, and increased funding for LIHEAP would be a step in the right direction.

Thank you again for this opportunity to speak.  I am happy to answer any questions you may have.