To Ease Big Hurt of Heating Costs
Pols are under increasing pressure to offer loans, tax credits, incentives
(7/31/2008) As the price of gas inches closer and closer to $5 a gallon, worries about the increased cost of heating a house next winter are persisting even at the hottest time of the year. Faced with pleas from constituents who already struggled under last winter’s prices, lawmakers at the state and federal levels are grappling with several measures that could ease the financial burden of those rising costs.
At Representative Tim Bishop’s offices, “the volume of calls on this outstrips any other issue,” he said on Tuesday. Callers’ suggestions range from tax credits for heating oil to opening up drilling on the outer continental shelf or in the Alaska National Wildlife Refuge and releasing oil from the Strategic Petroleum Reserve. “Mostly, it’s people saying, ‘This is intolerable. Please do something.’ ”
Mr. Bishop is co-sponsoring the Middle-Class Home Heating Relief Act, which would provide a tax credit of up to $1,000 for individuals and up to $2,000 for families to help defray the cost of oil, natural gas, and propane used to heat their houses. Individuals with an adjusted gross income of $100,000 or less and families earning $200,000 or less would qualify for the credit in the 2008 and 2009 tax years.
The bill, introduced in Congress last Thursday by Representative Tom Allen of Maine, a Democrat, also proposes a low-interest loan program that would allow people to borrow up to $5,000 a year for home weatherization projects at an annual interest rate of 1 percent for those with an adjusted gross income of $100,000 or less. The rate would be 2 percent for those earning less than $200,000. Those earning more than that would not qualify for the program.
The loans could be used for things like caulking and weatherstripping, insulation, new furnaces or boilers or modifications to old ones, more efficient water heaters, improvements to air-conditioners and other cooling system components, solar thermal water heaters, and wood stoves.
Borrowers who take advantage of the program would have to agree to repay the full amount of the loan within two years of receiving the money.
With Congress’s August recess beginning tomorrow, the bill is not expected to be taken up by the full House until after Labor Day, but Mr. Bishop is optimistic about its chances. “This is one I really think people on both sides of the aisle can support,” he said Tuesday. “In some ways, this is a version of the economic stimulus package we passed.”
“This is a national problem, and it requires a national response,” Mr. Bishop said. Considering that 95 percent of Americans earn less than $100,000 a year, he said, “it would have a positive impact on the vast majority of Americans.”
According to a report prepared by Senator Charles Schumer this month, home heating costs are expected to increase by 25 percent this year. The report says that residents of Suffolk County are expected to pay $175.1 million more to heat their homes in the 2008-9 winter.
For those at the lowest end of the income bracket, Senators Schumer and Hillary Clinton are among the co-sponsors of a bill that would provide an additional $2.53 billion for the Low-Income Home Energy Assistance Program, or LIHEAP. New York State would receive $250 million of that if the bill passes. Thus far, it has been blocked by Republican opponents.
At the state level, the State Senate, with the support of Senator Kenneth P. LaValle, passed a home heating relief act in June that would allow homeowners to take a $1,000 tax deduction for the cost of heating oil, natural gas, and propane. To qualify, individuals must earn no more than $75,000, and those filing a joint return must have a combined income of $150,000 or less. The bill is being held in consideration by the Assembly’s Ways and Means Committee.
The Assembly approved a windfall recapture and windfall profits tax to be imposed on major oil companies. Money from the tax would be used to supplement the Home Energy Assistance Program and fund energy efficiency and conservation measures. The bill was referred to the State Senate, where it was held in consideration by the Rules Committee.
A number of other Assembly bills aimed at reducing or defraying home heating costs met with less success, but there may be a chance for them yet. Although the legislative session is over, Assemblyman Fred W. Thiele Jr., who supports the measures, said he expects legislators to be called back to Albany. If they are, this is one of the most pressing issues to take up, he said last Thursday. “There’s a great deal of public pressure . . . and certainly a great deal of sensitivity to the issue.”
Last month, Mr. Thiele and other members of the Assembly’s minority conference proposed a five-point plan to help taxpayers deal with rising heating costs. Included in that was a $200 tax rebate for senior citizens, an income tax credit for taxpayers whose heating costs exceed 5 percent of their adjusted gross income, a tax credit of 25 percent, or up to $2,500, to offset energy-efficient home improvements, a sales tax exemption for alternative fuels, and a $500 tax credit for replacing an old oil tank.
All but one of the bills was held up in the Assembly’s Ways and Means Committee. The tax credit for energy-efficient improvements was not even considered by the committee.
While rising heating costs are being addressed by some lawmakers as an immediate concern, there is also a growing awareness that solutions to the problem need to be more long-term. Suffolk County last week held the first regional energy summit to discuss increasing “clean generating capacity,” developing renewable sources of energy, and increasing conservation and efficiency measures.