Rising costs bust budgets

Brenda Almeida, of Snow Shoe, decided to skip the tomatoes during a recent trip to the grocery store. Jenn Moore, of Lock Haven, now carpools to work.

Alan May, of Stormstown, says he can no longer afford a minimum delivery of heating fuel.When it comes to the cost of food, fuel and other necessities, Centre County residents are finding what is true nationally is also true here — prices are rising faster than earnings.

According to the U.S. Bureau of Labor Statistics, the consumer price index rose 4.1 percent in 2007. Some products, including fuel, saw double-digit price increases. But earnings for wage earners and clerical workers, as measured by the consumer price index, dropped 0.9 percent.

Melinda Smith, of Williamsport, said rising costs are affecting everyone and people in the middle really feel the crunch. She spends $80 a week on gas to commute to her State College-area job.

“There is no relief for folks in the middle,” Smith said.

The consumer price index measures the change in cost of what Americans typically buy with their money, including housing, food and energy. Some Centre County residents say they cut costs where they can — by using coupons and carpooling — but they can’t go without heat for their homes or food for their families.May said he works six or seven days a week as a taxi driver but isn’t making enough this winter to have his home fuel tank filled.

“I buy (the fuel) in jugs myself, so I don’t have to buy a shipment,” he said.

May said this is the first year he’s had to do that. Rising gasoline prices hurt his earnings, too, because as a taxi driver, he pays for fuel and use of the cab. He doesn’t fault the cab company — their costs are going up, too, he said.

The price of fuel increased 28.3 percent last year while gasoline increased 29.6 percent. Food and beverages, as measured by the CPI for all urban consumers, shot up 4.8 percent. Medical care cost 5.2 percent more at the end of 2007 than it had the year before.

Jenn Moore, a Lock Haven resident who works in the State College area, started carpooling last May to save money on gas.

“I have a considerable commute to work every day,” Moore said.

Christie Howard, a single mother of two young children, said she fell behind on her electric heat bill this winter and found out she couldn’t get help paying it because she hadn’t received a letter saying it was getting shut off.

Howard said her monthly heating costs haven’t gone up, but she’s being squeezed by higher costs for food and the gas she needs to drive to work. She said she uses coupons to go shopping and tries to work more hours at her part-time job — she’s paid $10 an hour by her employer, a local retailer — but was told she doesn’t qualify for additional heating assistance this winter.

“I try to get more hours and do what I can,” she said. “I do care about my credit ratings and those kinds of things.”According to Sovereign Bank’s 2008 Economic Outlook survey of 400 State College area consumers and about 115 businesses, consumers say the cost of gas and oil is the No. 1 challenge facing people in Centre County. The cost of living ranked second.

That confirms what Danyel Woodring, basic needs case manager at Community Help Centre, has been hearing from clients. She said the biggest complaint among clients is how much it costs to drive, “how it’s barely affordable to get to work and get back.”

She tries to help people searching for ways to cover fuel costs to heat their homes.

“I hear from a lot of people who can’t afford the minimum delivery,” she said.

If the rising prices of gas and oil are what workers say is hitting them the hardest, for business people, the cost of health care is just as troublesome. According to the 2008 Economic Outlook, health care costs tie with the price of gas and oil as top challenges for businesses in Centre County.

State College physician Bob Mooney recently switched his employees to an insurance plan with a $3,000 deductible to balance out the rising premiums. He also helps out at Centre Volunteers in Medicine and sees problems that patients there must deal with. CVIM provides free medical care to county residents who don’t have insurance.

“There’s a large number of people whose incomes, for instance, won’t allow them to procure health insurance but who also make too much for them to qualify for assistance at CVIM,” Mooney said.

Oranee Tawatnuntachai, associate professor of finance at Penn State Harrisburg, said as food and gas prices go up, people feel they have less purchasing power.

“You’re going to feel a little bit more pessimistic,” she said. “(With) the same money you have, you’re not going to be able to buy as much as before.”

She said the trend in Pennsylvania and the country is also going on around the world. With gasoline, for example, the demand from China and India is increasing while the supply isn’t.

Almeida, a Snow Shoe resident who was shopping recently with her sister in the State College area, said she’d looked at buying tomatoes on the vine but found the price at a couple stores was $4.99 a pound.

“I balked at paying $2.99,” she said.She and her sister also have noticed they’re paying more for soda, dog food and coffee. Ed Tate, of Bellefonte, took particular notice of coffee’s increasing price.

“What used to be a $5 can is now over $7,” he said.

But coffee, he said, is a necessity, so he’ll pay. Without it, he joked, “I’m not nice to be around.”

Anne Danahy can be reached at 231-4648.