SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
SENATE, No. 839
STATE OF NEW JERSEY
DATED: APRIL 5, 2018
The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 839.
This bill provides that every household in the State that is eligible to receive benefits under the Supplemental Nutrition Assistance Program (SNAP) shall receive a minimum annual energy assistance payment of $21 to qualify the household for a heating and cooling standard utility allowance under the SNAP program, unless a standard utility allowance would have been unavailable to the household under the State and federal criteria for SNAP and any applicable energy assistance programs in place as of July 1, 2013. Under the bill, this annual energy assistance payment is to be disbursed in accordance with the provisions of the Low Income Home Energy Assistance Program (LIHEAP) or other energy assistance program for which the household is eligible, as applicable. The bill provides that any costs associated with increasing LIHEAP payments must first be charged to the unexpended balance of federal funds available for the LIHEAP program, to the extent permitted by federal law and regulation. The bill authorizes the Commissioner of Human Services, in consultation with the Commissioner of Community Affairs, to adopt rules and regulations to implement the bill.
Prior to July 2014, the State had engaged in a practice called “heat & eat,” whereby the State made annual energy assistance payments of $1 to SNAP recipient households that were not enrolled in LIHEAP. This payment qualified these households for a “heating and cooling standard utility allowance” within the SNAP program, which had the effect of increasing the household’s monthly SNAP benefit. Under the federal Agricultural Act of 2014, households must receive more than $20 in annual energy assistance payments to maintain the household’s eligibility for the standard utility allowance under SNAP. This bill therefore ensures that eligible SNAP households that are not currently enrolled in LIHEAP can receive the heating and cooling standard utility allowance.
FISCAL IMPACT:
The Department of Community Affairs (DCA) has previously estimated (for a similar bill in a prior session) that between $3 million and $7 million will be added to the cost of the LIHEAP program to increase the $1 annual energy assistance payments that had been made prior to July 1, 2014 to $21 per year.
The Office of Legislative Services (OLS) cannot confirm or refute the DCA’s estimate because there is no available data on the current number of SNAP households not enrolled in LIHEAP that would qualify for the $21 LIHEAP benefit. Alternative sources have suggested that increasing the annual energy assistance payment to $21 per household will result in additional expenditures totaling $3.2 million and provide additional SNAP benefits to over 100,000 New Jersey households. A number of factors complicate this calculation and preclude the OLS from independently quantifying the potential cost that may result from the bill.
In addition, the OLS notes that the DCA’s estimate does not make clear if the additional cost to LIHEAP represents an increase of State funds, federal funds, or some combination of State and federal funds. Presumably, it would be possible to pay some of the increased costs with unspent LIHEAP funds. Significant balances exist in the relevant accounts, and federal rules are flexible with regard to how the State spends those funds.
The bill obligates the State to provide State funds for increased energy assistance costs that cannot be paid from federal LIHEAP funds, and any federal LIHEAP funds that are used for energy assistance subsidies may result in a reduction of funds available for weatherization assistance. This is so because federal LIHEAP funds that are not spent on energy assistance subsidies are made available to provide weatherization assistance to LIHEAP recipients.
The OLS also notes that the bill’s effects on the SNAP program are not expected to have a significant fiscal impact to the State. Currently, SNAP benefits are paid directly from federal funds, so an increase in SNAP benefits is not expected to have a direct fiscal impact to the State.