Low-Income Energy Assistance:

State Responses to Funding Reductions

HRD-88-92BR: Published: Apr 29, 1988. Publicly Released: Jun 2, 1988.

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Pursuant to a congressional request, GAO provided information on the Department of Health and Human Service's Low Income Home Energy Assistance Program (LIHEAP) in 13 states, focusing on: (1) the availability and use of oil overcharge funds; (2) federal allotments to LIHEAP, total LIHEAP funding, and funding projections; (3) the effects of LIHEAP funding cuts; and (4) the states' and interest groups' perceptions of the impact of LIHEAP funding reductions.

GAO found that: (1) the states used only 14 to 22 percent of available oil overcharge funds for LIHEAP; (2) the states varied widely in the amount of funds they had remaining from the settlements; (3) five states had oil overcharge funds to cover proposed fiscal year (FY) 1989 LIHEAP reductions, while proposed reductions in three states exceeded the total amount available; (4) LIHEAP reductions averaged 9 percent in FY 1987 and 23 percent in FY 1988 and were projected at about 40 percent for FY 1989; (5) nonfederal funding sources helped to ease, but did not totally replace, federal funding cuts; (6) the total number of households receiving heating assistance declined by 6 percent between FY 1986 and 1988, with eight states reducing heating benefit levels; (7) the number of states transferring some LIHEAP funds to other block grants decreased from nine in FY 1986 to five in FY 1988; (8) five states reported negative effects of funding reductions in terms of reduced benefits, more restrictive eligibility criteria, elimination of weatherization programs, and program closings, while the other eight states reported no negative effects due to oil overcharge funds, improved economies, mild winters, or improved energy efficiency; and (9) state officials and interest groups believe that funding reductions will continue to have a serious negative impact, and states have used almost all available oil funds and exhausted other funding options.

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