FY17 President’s Budget Would Cut Core LIHEAP Funding by $390 Million But Add $560 Million in Contingency Funds and $1.4 Billion in a New Multi-agency Fund

The Obama Administration released its fiscal year 2017 (FY17) budget on February 9, 2016. This budget would reduce core block grant funding for LIHEAP from $3.39 billion to $3 billion. This represents a cut of $390 million or about 12%. The budget did not provide a rationale for the cut. The budget would also allow states to set aside up to 40% of their block grants for weatherization purposes without HHS approval, up from the current law of a maximum transfer of 15%, which can be raised to 25% with HHS approval.

Other aspects of the budget are potentially very positive for LIHEAP. It would add two new provisions that would significantly increase funding for energy assistance purposes. Both would require authorizing law. The first would provide a new contingency fund of $560 million. This is possibly based on an earlier proposal from a few years ago that would be triggered if prices increased at a certain rate.

The second is a new multi-agency fund that would grow from $1.445 billion in FY 17 to $9 billion by 2026. The Budget documents do not provide any additional details on this fund or how it would be administered.

NEADA’s biggest concern is the 12% cut to LIHEAP’s base funding. New proposals are highly unlikely to get approved before the elections in the fall, which could result in Congress passing the budget cut without the additional resources in the form of contingency funds or multi-agency funds.

The budget also continues the set-aside of $3 million for training, technical assistance and monitoring. Hopefully we will have more details on the rationale for the cuts and details on the new initiatives in the next few days.

President Obama’s FY17 Budget

LIHEAP Budget and Contingency Fund (begins bottom right column on first page).

Multi-Agency Fund for Energy Assistance