Proposal to help families pay home utility costs advances
By Brigid Curtis Ayer
Families struggling to pay home energy bills may find relief if a proposal to assist them passes the Indiana General Assembly this year. The proposal, House Bill 1141, was passed by a unanimous vote in the House. The Indiana Catholic Conference (ICC), the Church’s official representative on public policy in the state, supports the legislation.
Rep. Peggy Welch, D-Bloomington, first author of the bill, said the legislation would reinstate the state sales tax exemption for the Low Income Heating and Energy Assistance Program (LIHEAP) for one year. It would allow an additional 7 percent of bill payment funds to help vulnerable Indiana households struggling to stay warm. (Related: Eligibility for the Low Income Heating and Energy Assistance Program)
House Bill 1141, in its original form, would have created a permanent tax exemption for LIHEAP. Welch said that while the permanent sales tax exemption portion of the bill was removed from the bill, “the most important thing was to reinstate the sales tax exemption for qualifying families for next year. Then hopefully in 2013, the next budget year, we can champion for a permanent sales tax exemption for LIHEAP.
“The legislation is not for utility bills this year, but would help people pay for utility bills next year,” she said. “If passed, the bill goes into effect [in] July 2012. So this would help pay for utility bills from July 1, 2012, until June 30, 2013.”
Welch explained that the federal government sends the state of Indiana some $80 million for LIHEAP, but that not all of that money goes to pay heating bills.
Some of the money goes for weatherization. Another portion goes to administration. Roughly $46 million goes to fund LIHEAP. The 7 percent sales tax exemption multiplied by the $46 million provides $3.2 million that would go back into the LIHEAP program to be spent on utility costs rather than going back into the state’s general fund. This will allow $3.2 million more to help poor families pay utility costs.
Welch said that some lawmakers were concerned about the general fund losing that money, but told colleagues, “If we can give a $73 million corporate income tax reduction, which I also supported to create jobs and help low-income families long term, then we can certainly address some of these short term concerns like LIHEAP,” Welch said.
“I am just thrilled that Chairman [Jeff] Espich and my Republican colleagues all agree that this was an important thing to do,” she said.
Welch attributes getting her bill a hearing and passing to several of her Republican colleagues, who serve on the House Ways and Means Committee.
“There were three members on the Ways and Means Committee who were totally sold on the idea of reinstating this—[Reps.] Suzanne Crouch, R-Evansville, Randy Truitt, R-West Lafayette and Ed Clere, R-New Albany,” Welch said. “And I really attribute this bill moving to their efforts and my good friend and Democrat colleague Rep. John Day, D-Indianapolis, also a co-author who has worked on this issue.”
Clere, a co-author of the bill, said, “In this economic climate, every dollar matters, especially to people in need. We’ve done a lot to make Indiana more attractive for economic development and job creation, which benefits all Hoosiers. This bill provides direct assistance to those who need it the most.
The bill helps ensure that every dollar goes to helping families, Clere said. “The money is intended for energy assistance. There’s no reason to collect sales tax on this money.
“There are many things in the state that are working toward economic development and improvement in the economy, but not everyone is seeing that improvement on a household level. It’s important that we support ways we can help support those folks,” Clere said. “The recession is technically over according to the economists, but the recession is still being felt by many Hoosier households and there are a lot of families still struggling. This bill provides some direct relief.”
The Legislative Services Agency, an agency which does legal and financial analysis for newly proposed laws, estimated that $3.7 million to $4.4 million would go into the LIHEAP program under House Bill 1141.
Funding for the state’s energy assistance program comes from federal sources and dedicated state funds. Since the early 1980s, the federal government has annually appropriated funds to states to provide energy assistance to low-income families.
In 2011, more than 45,000 state residents called Indiana’s Connect2Help hotline—211—to request help with utilities, the number one need, according to Kathy Williams, an advocate for
low-income families who has been involved in the issue at the Statehouse.
Williams’ research also noted that as of Dec. 3, 2011, the hotline had already received about 2,500 more calls for utility assistance than in 2010.
According to a United Way survey, 42 percent of people using 211 in 2011 were first-time callers.
House Bill 1141 has moved to the Senate for further consideration.
(Brigid Curtis Ayer is a correspondent for The Criterion. For more information about the Indiana Catholic Conference, log on to www.indianacc.org.)
Eligibility for the Low Income Heating and Energy Assistance Program
To be eligible for this state-run grant that is funded by federal tax dollars, a household’s income must not exceed 150 percent of the poverty level or 60 percent of the state median income.
According to Rep. Ed Clere, R-New Albany, who is co-author of House Bill 1141, the grantees may not set income eligibility standards below 110 percent of the poverty level, but they may give priority to those households with the highest home energy costs or needs in relation to income.
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Also, you can access the archived updates, ICC positions and other background information at the ICC Web site at www.indianacc.org. †