High gas prices ripple through economy

By RONNIE ELLIS
CNHI News Service

July 05, 2008 01:08 pm

GLASGOW — Last year, Roy Chapman mowed his hay field with $50 of diesel fuel. This year, it cost Chapman, 38, of Glasgow, $150 to mow the same field.
Spiraling gas prices aren’t just hurting at the pump — they’re showing up in everything people buy and it’s taking a heavy toll on people’s income and spending. Producer prices increased 1.4 percent in May, according to the federal government, the highest increase in six months.
“I think we’re seeing more impact away from the pump,” said Christina Bentley, 35, who operates Corbin’s United Effort, a community non-profit that provides utility assistance and operates as a clearing house for independent food banks. “It’s bad at the pump, but where I’m really seeing it is in food. I paid $6 for a gallon of milk last night.”
There are hidden costs. There are fewer state police cars visible on highways. School districts are looking at 4-day school weeks and reducing the number of bus stops to save on fuel. Pizzas cost more and waiters and waitresses are seeing fewer tips. Non-profit groups fear a decline in donations at the same time their clients are experiencing increased need.
Gas reached $4.29 in Louisville on June 27 where because of pollution indices retailers sell more expensive reformulated gasoline. Prices hovered at the $4 mark throughout most of Kentucky. Barren County’s road department has gone to a 4-day work week so employees can save money driving to work. So has the Kentucky Secretary of State’s office. Retailers, farmers and laborers are all hurting. It’s a major issue in election campaigns for president, the U.S. Senate and legislative races.
The state motor fuel tax is going up another 1.4 cents but the state is fearful it’s eventually going to get less funding as gas consumption has begun to decline.
Chapman said it’s all he can do just to keep up.
“You put out a crop and everything you make goes right back into the oil and diesel,” said Chapman who supplements his income by delivering papers for the Glasgow Daily Times. He raises tobacco on 52 acres, but “now they’re talking that they want to get rid of it (tobacco). So anyway you go, you can’t make it.”
It costs more just to earn money.
Hershel Boggs, 52, of Annville in Jackson County, drives 100 miles each way to his job at Toyota in Georgetown where he’s worked for nearly 20 years. He’s a quality control inspector — “one of the last people who looks at a car before it goes out of the door.”
His wife, Vickie, 53, commutes to London where she’s a Licensed Practical Nurse at Saint Joseph-London Hospital, working two 12-hour shifts a week. They have two grown sons. Aaron, 31, is married and lives in Georgetown, working at Toyota. But Victor, 34, has Down’s syndrome and medical bills so Vickie works part-time to stay home most days with him.
“We moved to the Bluegrass area, but we didn’t like it too well,” Hershel Boggs explained. “We moved back, but it’s crazy now with the cost of gas. We talked about moving again, but I’m living in the house I grew up in and we don’t intend to move.”
He knows their combined income of close to $90,000 is far more than most folks in Jackson County earn. But it’s getting harder to make ends meet, even after he traded in his Toyota pickup for a more fuel efficient Toyota Corolla that gets 33 to 34 miles to the gallon.
“I’ve got too many years in at Toyota to turn around now,” Boggs said. “I’m hoping to finish my career there — it’s a good job and a good place to work.”
Boggs estimates he spends 25 percent of his wages for his car payment, gasoline costs and maintenance. And the cost of gas is hitting his pocketbook from the other side. Car sales are down and Boggs rarely gets overtime these days.
“Before, the overtime just about covered all my gas costs, but now overtime is zero or very close to it.”
Boggs worries about how his neighbors and older people will pay their bills. Everything costs more — milk, orange juice and now Jackson Rural Electric Cooperative has announced an increase in utility rates.
“I knew it was coming, but I didn’t expect 9 and a half percent,” Boggs said. “What are people who are on a fixed income going to do? I pray for these people less fortunate than us.”
Boggs said he drives less when he’s at home on weekends, they don’t dine out as much and he uses air conditioning in his house less frequently.
The pain is reaching into some unlikely places. Daniel Yoder is an Amish farmer who lives on the Barren County-Warren County line. He owns 13 horses which he uses to plow his fields and travel by buggy, grows tobacco, doesn’t use electricity and raises much of his own food. But even the Amish buy some food items and other supplies.
“We see it in groceries and things like that,” Yoder, 51, said. “I notice it in the cost of fertilizer — I call it extremely high. It puts a squeeze on us.”
Yoder said the higher prices for fertilizer, groceries and the 15 gallons of fuel he uses each month to operate wood-cutting machinery have forced him to allow his sons to “hire out as labor” more frequently.
“It’s just getting harder to make ends meet — for everybody,” he said.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. He can be reached by e-mail at rellis@cnhi.com.

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