Governor Rick Snyder, together with state utility companies and social service agencies, is warning that federal heating assistance cuts proposed by the Obama administration would have disastrous effects across Michigan.
Congress is now considering President Barack Obama’s proposal to cut funding for the Low Income Home Energy Assistance Program (LIHEAP) by 50 percent.
The block grant program is a major part of the safety net in Michigan and the proposed cut would leave the state with $120 million less to help subsidize heating costs for 1.2 million low income households.
In a letter to the Senate subcommittee that is looking at the plan, Gov. Snyder said that people in Michigan will suffer if the proposal is adopted, telling them that Michigan “would have to either reduce the number of eligible recipients, or reduce the level of assistance to a point that would not cover one month of heating for this coming winter. As you know, winters in Michigan can be brutally cold.”
The Coalition to Keep Michigan Warm, a group of utility companies and assistance agencies, warns that the cuts would create a crisis the Michigan is not equipped to handle.
“Should the threatened cuts occur, the social and economic burden to the State of Michigan, the nonprofit sector and low-income residents will be unprecedented,“ the group wrote.
“Michigan has used its past LIHEAP funding to help low-income families keep up with their bills, weatherize their homes, and educate them about ways to consume less energy. Cuts to Michigan will increase the home energy burden for the more than 600,000 households who annually benefit from LIHEAP energy-assistance to make ends meet during the state’s hot summer days and long, cold winters. Note that even with the current level of LIHEAP funding, only about half of the 1.2 million low-income households in Michigan that were eligible actually received energy-assistance.”
The reduction would hit Michigan as lingering unemployment is forcing ever more people to seek help.
Jim Crisp, executive director of the Michigan Community Action Agency Association, which connects people with LIHEAP assistance through its 30 local community action agencies, says the upcoming fiscal year looks dramatically grim.
There’s been a 20 percent increase in people needing food, weatherization and fuel assistance this year, he said.
“A lot of these folks are first time people,“ he said, “folks who have not been in this situation before.”
As the recently middle class try to figure out how to keep going, the safety net in Michigan is developing big holes.
“We’ve seen reduction of the Earned Income Credit,” said Crisp, “We are looking at the loss of [the state Low Income Energy Efficiency Program], and a 50 percent reduction in LIHEAP. Also there is talk of practically flat lining federal weatherization assistance.”
“We are getting cuts on all fronts,” he said. “I’m afraid the alternatives aren’t very plentiful.”
Shut-offs don’t just cause misery for the families who lose utilities, said Maureen Taylor director of the Michigan Welfare Rights Organization.
People will steal utilities through risky illegal hook-ups, run cables from neighbors’ houses to power heating units, or build fires inside their homes to keep warm, she said, and all of these actions endanger lives.
Cuts to LIHEAP and other energy assistance programs are also likely to increase the burden on the state foster care system, she said. “If you have minor children and you are receiving welfare and the welfare dept. finds out that you are without lights, heat or water, the state may take custody of your children.”
The federal energy assistance cuts could come just as Michigan begins its policy of ending cash assistance to anyone who has been on welfare for four years.
Taylor described these converging circumstances as a “death train.”
DTE Energy spokesman Scott Simon is urging customers to write to their legislators in opposition to LIHEAP cuts.
“In this era of budget cutting there has to be some safety net for people who can least afford to pay their bills,” he said.
In the meantime, and as cold weather approaches, DTE is urging people to take steps to reduce their energy use.
“They should definitely seal up any cracks and window frames, do a lot of calking,“ Simon said. “Put plastic over windows in the winter, turn heat down and put on a sweater, and also turn it down at night. If it is possible, get a programmable thermostat.”
Though DTE is fighting proposed LIHEAP cuts, the company is unlikely to suffer much even if many more households are unable to pay their bill.
The Michigan Public Service Commission has granted the company permission to recover 80 percent of its unpaid invoices through surcharges on bills.Tags: budget, DTE Energy, Poverty, Rick Snyder, U.S. Senate