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Community action agencies scramble for weatherization funding

Monday, March 05, 2012

A looming 37 percent cut in low-income weatherization funding will result in 50 layoffs and an longer waits for access to the program, according to state weatherization assistance providers. The waiting list for weatherization assistance is already longer than one year.

To offset the cuts, community action agencies are lobbying the Legislature to increase a fuel tax.

Paul Zabriskie, director of weatherization for Central Vermont Community Action Council, said federal funding from the American Reinvestment and Recovery Act will end this spring, leaving the state’s low-income weatherization programs in a lurch.

“ARRA’s ending, and we’re dropping off a cliff on July 1st,” Zabriskie said.

With the loss of federal funding, Zabriskie said, the programs could go back to 2005 budget levels. The federal funds, which started in 2010, allowed the programs to build momentum, but now that the money is projected to run out they are trying to find a way to keep going.

The big problem, said Bob Stannard, a lobbyist who represents community action agencies, is that the state expanded the program, creating an expectation from low-income Vermonters. Pulling back on the program now, Stannard said, would give the program a “black eye.”

Zabriskie dropped into both Senate and House natural resources and energy committees last week to pitch the idea of increasing a fuels tax to fund the programs, which provide weatherization services for low-income households.

A bill pending in the Senate Natural Resources and Energy Committee would double the tax on the retail sale of fuels like propane, kerosene and heating oil. Currently, the fuel gross receipts tax is 0.5 percent on the retail sale of these fuels. The amendment to bump it up to 1 percent is part of a bill that would require disclosure of the energy efficiency of residential and commercial buildings.

Zabriskie said raising the tax makes sense because there is a direct connection between heating oil and thermal efficiency.

“The gross receipts tax is certainly the vehicle we have, and it’s the closest connection between the two,” Zabriskie said.

The committee will likely vote on the proposal early next week after the Town Meeting Day break.

Sen. Virginia Lyons, who chairs the committee, said she supports the idea of raising the tax.

“Demand is starting to happen because people are becoming more and more educated about saving money instead of burning it up and sending it out the leaky windows,” Lyons said. “[With weatherization] we’re plugging the leaks and keeping the money at the same time doing a good deed for environment.”

She said the idea originally came from a report by the Regulatory Assistance Project.

The bill in Lyons’ committee will still need to go through the Senate Committee on Finance if it gets voted out of committee.

“I have no illusions that there’s going to be overwhelming support for it,” Lyons said.

The Vermont Fuel Dealers Association opposes the tax increase.

Matt Cota, executive director for the association, said the tax will have a real impact on consumers.

Cota said the tax right now is two cents per gallon of fuel oil or propane. Doubling the tax to four cents a gallon would be noticeable for consumers, he said. The tax hike, in combination with the 1 cent Petroleum Cleanup Fund fee, would mean the average customer will have to pay $40 per year in taxes to heat their home, according to Cota. Fuel dealers have with the tax increase is the fact that they cannot itemize the charge on customers’ bills.

“The fuel dealers by nature will have to pass on a four-cent tax,” Cota said. “Our concern is we’re taxing the consumer yet we’re prevented from itemizing it on the bill.”

Weatherization funding took another hit this year, when the state borrowed $1 million from a weatherization trust fund to make up for a shortfall in Low Income Home Energy Assistance Program funding. A study produced March 1 by the Vermont Department for Children and Families suggests the state should consider a steady stream of funding to supplement the federal LIHEAP block grant the state receives each year. The study uses the gross receipts tax as an example of the type of tool the state could use to fund LIHEAP.

Community action groups have looked to the Public Service Board for assistance also. The board is currently considering approval of a merger between the state’s two largest utilities. Under board precedent, Central Vermont Public Service is required to return millions of dollars in windfall money to ratepayers as a result of a profitable merger.

The Vermont Community Action Partnership in January requested that the PSB consider using the so-called “windfall” money for low-income weatherization. The AARP is a party to the proceeding, and it is pushing for cash payments for all CVPS customers rather than investment in efficiency programs, as the utilities propose.

Another party in the docket, Sen. Vince Illuzzi, has written draft testimony supporting having the money fund low-income weatherization. Illuzzi intervened in the proceeding on behalf of a group of ratepayers requesting independent counsel to represent the Department of Public Service. He has since changed his tune but remained a party in the docket.

Illuzzi’s testimony states the low-income weatherization programs need significant investment for long-term success.

“Directing these funds toward this purpose is a wise investment for ratepayers, to achieve the greatest societal benefit and ultimately reduce the demand and cost on programs like the Vermont Low Income Heating Assistance Program (LIHEAP),” Illuzzi’s testimony states.

Alan Panebaker