By Jessica Wray
The Statehouse File
Indiana Attorney General Greg Zoeller thanks legislators in a press conference Wednesday for a bipartisan law providing more funding for low-income energy assistance. Photo by Jessica Wray, The Statehouse File
INDIANAPOLIS – Indiana is beefing up funding for a program that helps low-income Hoosiers pay their heating bills thanks to its share of a major national lawsuit’s settlement.
A new law will have the state spend about $4 million per year over the next eight years out of the settlement on the Low Income Home Energy Assistance Program, which in 2011 provided participants with an average of $420 in help with utilities.
In effect, it will keep those who qualify for the program from having to pay 7 percent sales tax on their utility bills.
The additional funding comes from a pot of money Indiana received from a $25 billion multi-state foreclosure lawsuit settlement between 49 states and five key mortgage lending banks.
Indiana Attorney General Greg Zoeller and other key state legislative fiscal leaders said Wednesday that the measure will provide financial assistance to the same Hoosiers who would be most at risk of being foreclosed upon.
Zoeller said the payout from the banks will “lock in new consumer protection and also does quite a bit to support the immediate needs of homeowners.”
Indiana’s portion of that money comes out to about $145 million. Of that, $100 million will go to those whose homes were foreclosed upon and struggling current borrowers who will have a chance to refinance.
Another $15 million will go to fund consumer protection programs statewide. The remaining $28.8 million will go to LIHEAP, and be spread over the next several years. That’s important, lawmakers said, as federal funding dries up.
“There is limited dollars that are available,” said Rep. Peggy Welch, D-Bloomington. “And unfortunately the feds are continuing to give less and less to the states to be able to provide this assistance.
The new state law gives an additional $3.4 to $4.2 million annually to the LIHEAP. This figure is based on the 7 percent sales tax Hoosiers have to pay on their utility bills, and it will be used to cover that percentage of their bills.
Sen. Luke Kenley, R-Noblesville, said he believes the $28.8 million should last about eight years, depending on the demand.
“Of Hoosier households assisted by LIHEAP last year, 26 percent were elderly. This program is critical to the health and well-being of so many of our seniors,” said June Lyle, the AARP Indiana state director.
Other states have looked at their share of the settlement and decided to use portions of their funding for other programs, not related homeowner or foreclosure assistance.
Heather Morton, legislative analyst with the National Conference of State Legislatures, said Utah and Colorado have allocated funds from the settlement for other programs.
“In Utah they want to hire mortgage fraud investigators and they are using some of the money for homeless shelters and low income housing,” Morton said, adding that the state socked away about $11 million in its rainy day fund.
Morton said that in Colorado, policymakers are considering using a portion of the money to renovate a former prison into a housing and substance abuse center for homeless veterans.
Jessica Wray is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.