Daily Archives: July 3, 2008

High gas prices threaten to shut down rural towns

Back at the Forks General Store, Hanley cringes when she’s asked how much higher gas prices might go. “I don’t see any end, to be honest,” she says. “I think this country is headed into a depression.”

USA TODAY | Jul 2, 2008

By Judy Keen, USA TODAY

FORKS OF SALMON, Calif. — The price of gas isn’t an annoyance here. It’s a calamity.

Peggy Hanley uses a generator that burns a gallon of diesel fuel every hour —at about $5 a gallon— to power Forks General Store, the only place to buy groceries for miles around. There’s no electric service, so Hanley, the owner, uses the generator to run eight refrigerators, nine freezers, lights and two ice machines for the store, which has been in a trailer since a fire destroyed the original building in 1994.

There are no utilities and no public transportation in this unincorporated town of a couple hundred people along a narrow road that winds through the mountains 314 miles north of Sacramento. Many people here buy gas for their vehicles and gas or diesel for generators that power their homes.

“I’m scared to death” of rising fuel prices, Hanley says. At the store, the hub for visiting whitewater rafters and residents of other isolated towns, gas cost $5.30 a gallon on a recent day when the national average was $4.07.

This community may be an extreme example of how rising gas prices are hitting rural Americans particularly hard, but people in small towns from Maine to Alaska are in a similar bind as those here.

Soaring gas prices are a double-whammy for many rural residents: They often pay more than people who live in cities and suburbs because of the expense of hauling fuel to their communities, and they must drive greater distances for life’s necessities: work, groceries, medical care and, of course, gas.

Meanwhile, incomes typically are lower in rural areas, making increasingly high gas prices an especially urgent concern. Rural households also are more likely to have older, less fuel-efficient vehicles such as pickups, the Federal Highway Administration (FHWA) says. The average age of a vehicle in a rural household: 8.7 years, compared with 7.9 years for an urban vehicle.

Rural residents do more driving, too — an average of 3,100 miles a year more than urban dwellers, the FHWA says.

A May survey by the Oil Price Information Service (OPIS), a fuel analysis company, and Wright Express, a company that collects data on credit card transactions, found that people in rural areas spend as much as 16.02% of their monthly family income on gas, while people in urban areas of New York and New Jersey spend as little as 2.05%.

“The people who can least afford this are getting hit the worst,” says Glen Falk, retail pricing manager at OPIS. “These are people who can’t telecommute or carpool or use public transportation or any of the other things that people in metro areas can do to ease the pain.”

Leaving town to get groceries

When the only gas station in Allen, Neb., closed last summer, a gallon of gas cost $2.56, according to prices posted on two abandoned pumps. Since then, Allen’s 411 residents have been driving 11 miles to Wakefield or 28 miles to South Sioux City to fill up.

Allen’s grocery store went out of business last August, forcing people to shop in South Sioux City or 21 miles away in Wayne. Doctors, dentists and other essentials also require a road trip. The nearest movie theater is in Wayne.

“You have to leave town for about everything,” says Jerry Schroeder, an insurance agent who has lived in Allen for all of his 57 years. He recalls when the farming town, founded in 1891 as a railroad stop, had four grocery stores, four gas stations, two banks, a doctor, two farm equipment dealers and a mortuary.

Now Schroeder often parks his gas-guzzling Dodge pickup, which he calls “the last truck I’m ever going to own,” and uses his wife Donna’s Mercury Grand Marquis. It gets 25 miles per gallon. “We’re all going to have to change,” he says.

There’s still a school, restaurant, day care center and bank in Allen, but about three-fourths of the residents commute to jobs out of town. Security National Bank president Rob Bock and other local leaders say a gas station is key to the town’s survival. Residents formed a corporation and hope to open a gas station/convenience store later this year on the site of the old station.

“Even in a bedroom community, people need the basic core services,” Bock says. “We want to maintain school enrollment and property values.”

Elizabeth Macrander, 24, has worked at the bank in Allen since November. For the first few months, she drove to work every day from Sioux City, Iowa, filling up her Mercury Mountaineer (14-15 mpg) every two days. “I didn’t have a paycheck left,” she says, so in May she bought a house in Allen.

Even with a house payment, she’s saving money since cutting her commute, Macrander says. She drives her 10-month-old daughter, Jordan, to day care 5 miles out of town daily and carefully plans other travel. On her next trip to Sioux City, she’ll visit her parents and sister, buy groceries and gas and hit Wal-Mart for cleaning supplies. “You make the list, and you get everything done at once,” she says.

It’s more difficult for Allen Kleinschmit to pare gas usage. He runs the Pioneer Seed distribution center in Allen, tests soil and gives irrigation advice to area farmers. That adds up to 100,000 or so miles every year on his Chevy Silverado truck, which gets 7 or 8 mpg if he’s hauling equipment. He drives 25 miles to work from Coleridge.

Don Schmidt, superintendent of Allen Consolidated Schools, budgeted $37,500 for fuel in the 2008-09 school year, up from $25,000 this year. Higher gas prices make it more difficult to recruit teachers and coaches, he says, and field trips to the Omaha zoo 120 miles away and other destinations are at risk.

The OPIS survey said Dixon County residents spend an average of $198.82 a month on gas, 6.44% of their monthly income.

Shelly Jones quit her job in Sioux City after moving to Allen with her husband, Jay, and their three kids because the commute was so expensive. This summer, they’re using their Big Country camper less often and stockpiling food and milk in the extra refrigerator in their garage to reduce grocery runs.

High gas prices make Jones angry and worried about the future of the town she loves. “You’re almost forcing the rural communities to shut down,” she says.

Jobs scarce, money tight

Brett Denight, 34, bought a house in Sawyers Bar, Calif., a wide spot on the mountain road with a few houses, a couple of years ago.

Like the Forks General Store a few miles away, he has no electric service. He installed three solar panels on his roof, but a diesel generator runs his washing machine and the power tools he uses to build cabinets and other carpentry work. The generator consumes a gallon of fuel every eight hours.

Gas has always been expensive around here, Denight says, but he’s had to alter his routines since it hit the $5 mark. When he drives the 54 miles to Yreka, he stocks up on food and other supplies. “You’re always asking people to pick things up for you if they’re going to town,” he says. He visits his girlfriend in Eureka, a 124-mile drive one way, less often. When he buys gas, he also fills up a 40-gallon tank that sits on the back of his truck.

This part of Northern California, near the Oregon border and bisected by the Klamath and Salmon rivers, is wild and beautiful, but it’s too isolated to attract many tourists except for rafters and people searching for Big Foot.

Many of the small towns were once gold-mining camps, then centers of the timber industry. Both businesses are mostly gone now, and jobs are scarce. Siskiyou County’s unemployment rate was 8.7% in May, when the national rate was 5.5%. The OPIS study said county residents pay $183.11 a month for gas, or 7% of monthly family income.

People come from miles around to buy gas and groceries in Happy Camp, population 1,110. At Connor Cardlock, the only gas station, gas and diesel cost more than $5 a gallon. Except for the hours between 9 a.m. and 5 p.m., customers must use credit cards to buy gas. People who don’t have credit cards arrive with friends who do and fork over cash to compensate them.

T.J. Day, 43, a maintenance worker for a local tribe, shakes his head with disgust as he fills up. He figures it will cost him $40 worth of gas to drive 70 miles to Yreka and 70 miles back. “You can’t afford to go anywhere anymore,” he says.

At Parry’s Market, employee Dan McCarthy, 50, says the store pays 2-3 cents more each week for almost every item it stocks because of rising freight costs. “Where do you catch a break?” he asks.

‘It’s very frightening’

The situation looks even more dire to Karen Derry and Nadine McElyea. They work at Happy Camp’s Family Resource Center, which provides emergency assistance, mental-health outreach and other services.

McElyea worries that senior citizens in remote areas could die if they neglect their medical needs because of the high cost of getting around. Some poor residents and senior citizens come to the center because they’re running out of food, she says.

In the past few weeks, calls from people needing medical attention and help paying utility bills have soared, says Derry, the center’s director. “I worry a lot, especially about the elders,” she says. “It’s very frightening.”

Jodi Henderson, who works for Happy Camp’s volunteer ambulance service, is alarmed, too. Reimbursements from the state dropped 10% Tuesday, creating a gap in funds to offset emergency runs to Yreka, which cost at least $1,200 each. The service has two paid employees, 13 volunteers and two ambulances. The one used most often has 225,000 miles on it and gets about 8 miles per gallon.

Forty-four miles south of Happy Camp at the senior center in Orleans, supervisor Babbie Peterson sees the concern in the eyes of the elderly who come for lunch every day. She frets that she’ll lose the volunteers who cook and serve the meals and deliver them to the house-bound. She dreads the inevitable breakdowns of the center’s furnace or refrigerators because service people drive two hours from Eureka to get here “and they charge a $500 travel fee.”

Frank Woodman, 79, who came to the senior center for lunch with his mother-in-law Mary Silva, 93, calls gas prices “terrible.”

“At our age, we have to go to the doctor quite often,” he says. “That’s 38 miles each way, and you always think about how much it’s costing in gas. I know people who don’t bother going, even when they know they need to.”

Shirley Reynolds, 73, who drives 160 miles a month to pick up and deliver supplies for a food bank, says she knows seniors who “haven’t been in Eureka for six or seven months. They can’t afford it.” Reynolds drives a Chevy pickup that gets 15 mpg. “I parked my Cadillac six months ago,” she says.

Back at the Forks General Store, Hanley cringes when she’s asked how much higher gas prices might go. “I don’t see any end, to be honest,” she says. “I think this country is headed into a depression.”

Inflated gas prices causing family hardship for 90% of Americans

9 in 10 see rising gas prices causing family hardship

Associated Press | Jul 1, 2008

By ALAN FRAM

WASHINGTON (AP) — Four dollar a gallon gas has stolen a beach vacation in South Carolina from Julie Jacobs’ family and exotic bath washes from Angela Crawford. Phil English had to sell his beloved but fuel-guzzling red pickup.

Like a plague that does not discriminate by economic class, race or age, soaring gas prices are inflicting pain throughout the U.S. Nine in 10 are expecting the ballooning costs to squeeze them financially over the next half year, an Associated Press-Yahoo! News poll said Monday.

Nearly half think that hardship will be serious. To cope, most are driving less, easing off the air conditioning and heating at home and cutting corners elsewhere. Half are curtailing vacation plans; nearly as many are considering buying cars that burn less gas.

As the price has spiraled upward so, too, has the public’s ire.

Two-thirds consider gas prices an extremely important issue, edging the economy and outpacing health care and Iraq as the country’s most distressing problem. In November, when gas cost about $1 a gallon less than today, just under half rated it extremely important.

“Do you think there’s an end in sight? I don’t,” said the 33-year-old Crawford, a Dallas homemaker, said in an interview.

She says switching to bar soap from a favored lotion is one of many “little small luxuries” she has given up, along with fewer restaurant meals and new clothes. She also has talked with her husband, a flooring contractor, about finding a job involving less long-distance driving with his heavy van.

“It’s depressing and it makes you nervous,” she said.

The AP-Yahoo! News poll, conducted by Knowledge Networks, has tracked the same 2,000 people since last fall to see how their views change during the presidential campaign. The latest survey shows how the price of gas has caught or eclipsed every other issue, not just as a political topic but as a problem in peoples’ lives.

“You’re saddened prices are going up and you can’t do the extra things you would have done,” said Amy Pysarenko, 35, of San Antonio, whose concern about gas prices has grown since November. She says while her family has cut back on amusement park visits and saving for their children, “I feel fortunate because maybe someone else eats beans instead of hamburgers.”

The 47 percent in the most recent survey who expect higher gas costs to cause serious hardship is about the same as in last year’s poll, but an increase from the 30 percent who said so in an AP-Ipsos poll in June 2004. Then, regular gas averaged $1.97 a gallon nationally, according to the federal Energy Information Administration.

Lower-income people, of course, are bearing the brunt of it. As higher prices push grocery, pizza delivery and other costs upward, just over half of those without college degrees — and about the same number earning less than $50,000 a year — are expecting serious personal financial problems to result.

“We just don’t do as much,” said William Fisk, 39, a former dishwasher in Freeport, Maine. “We used to go out to have dinner, but we’re cutting way back on that.”

Yet significant numbers of the better-off are feeling pain, too. Four in 10 people in families earning $50,000 to $100,000 annually, and one in six earning more than that expect serious financial hardships from rising gas costs, as do one in three college graduates.

Many lower-earning families are responding by easing their use of air conditioning and heating, trimming vacation plans and cutting other spending. But higher-income people are often not far behind.

Two-thirds earning under $25,000 a year are cooling and heating their homes less, as are nearly six in 10 people earning more than $100,000. Just over four in 10 of the lowest earners are cutting vacation spending — only slightly likelier than those earning at least six figures to do so.

Rich or poor, black or white, young and old, nearly everyone is looking to drive less: A nearly uniform seven in 10 say they are reducing driving. That compares with six in 10 who said so in an April 2005 AP-AOL survey.

Jacobs, a homemaker and mother of three in Baltimore, said gas costs forced her to turn down two summer trips — a cousin’s wedding in North Carolina and a vacation with her parents in Myrtle Beach, S.C.

“My parents said `Come down, spend a week with us,'” said Jacobs, 35. “But when you add on the expense of gas, it’s just not worth it.”

Ironically, Jacobs plans to begin taking lessons this week for her first driver’s license. “Just as prices go through the roof,” she said.

Four in 10 are considering buying a vehicle that gets better gas mileage than their current one. That is about the same number who said so three years ago.

Some have already taken that step. English of Papillion, Neb., sold his 1998 Ford pickup, which got about 13 miles per gallon, for a more fuel-efficient convertible.

“It was a nice truck,” said English, 43, an aircraft mechanic. “It didn’t feel good” to get rid of it “and it still doesn’t,” he said.

Midwesterners are among the likeliest to think rising gas costs will cause them serious personal hardship; Southerners are among the more willing to reduce driving.

As a political issue in the presidential campaign, gas prices provide a slight edge to Democrat Barack Obama. More prefer him over Republican John McCain to handle it, 28 percent to 20 percent, while additional 18 percent trust both equally.

There also is a strong sense of powerlessness. One-third do not think either candidate can deal with the problem. That includes half of independents, one-third of Republicans and one-quarter of Democrats.

The AP-Yahoo! News survey of 1,759 adults was conducted from June 13-23 and had an overall margin of sampling error of plus or minus 2.3 percentage points. Included were interviews with 844 Democrats and 637 Republicans, for whom the margins of sampling error were plus or minus 3.4 points and 3.9 points, respectively.

The poll was conducted over the Internet by Knowledge Networks, which initially contacted people using traditional telephone polling methods and followed with online interviews. People chosen for the study who had no Internet access were given it for free.

Prince Charles’ reported income climbs to $32 mil – but his taxes drop by $10,000


Why is this man smiling? Prince Charles saw his income rise by £1.1million last year  –  and his tax bill fall by £5,000. Perhaps he is also tickled by the fact that the British taxpayers subsidize his already opulently wealthy family with tens of millions in public funding every year, and still bow down to them as though they were gods.

“Charles is earning ever greater amounts from the Duchy of Cornwall and managing to pay ever less tax.”

DAILY MAIL | Jul 1,  2008

The future king collected some £18,727,000, most of it from his Duchy of Cornwall estates.

But he was able to write off £10.4million against tax as business expenses and official spending.

His accounts show this included office stationery and staff salaries, among them his butlers and valets, and even the cost of maintaining the flower borders at Highgrove, his country estate.

Experts said Charles’s tax bill of  £3.4million amounted to just 21 per cent of his pretax income. But aides stressed that he paid 41 per cent on the amount eligible for tax.

The prince’s private secretary Sir Michael Peat insisted: ‘His tax affairs are absolutely whiter than white and the Inland Revenue go through them with a fine-tooth comb.’

Clarence House said Charles and the Duchess of Cornwall had tried to cut costs ‘at all levels’ and their personal spending had dropped by £400,000 to £2.2million.

It said the prince and his family  –  including his sons William and Harry  –  cost only 4p a year for every man, woman and child in the UK.

But Labour MP Ian Davidson, of the Public Accounts Committee, warned that his colleagues would continue to examine the Duchy’s accounts ‘with vigour’.

He said: ‘Yet again, Charles is earning ever greater amounts from the Duchy of Cornwall and managing to pay ever less tax.’

The prince’s Annual Review includes a detailed report on Charles’s ‘green’ credentials. It says he has cut his carbon footprint by 18 per cent by switching to environmentallyfriendly sources of electricity and heating and reducing his travel.

Even his Aston Martin sports car has been converted to use bioethanol fuel produced from surplus British wine.

The prince’s main source of income  –  £16,273,000  –  is the Duchy of Cornwall, a private estate with properties in 23 counties.

Last year its value rose to £647million as soaring food prices led to the biggest increase in agricultural land values for 25 years.

Charles also receives funding from the Government to cover the cost of running his London office, his official residence, Clarence House, and his travel on official business and overseas tours.

The £10.4million he was able to write off included £5.4million in staff costs, £416,000 for official entertaining and receptions, £139,000 on utility bills and £63,000 on maintaining his gardens.

Although he and Camilla are keen gardeners, the majority of the costs of the Highgrove flower beds are listed as tax-deductible because they are ‘mainly’ used for official visits by members of the public.

In all, Charles employs 111 staff, including valets and orderlies.

Mike Warburton, senior tax partner of accountancy firm Grant Thornton, praised the prince for the ‘transparency’ of his accounts and said the Royal Family ran ‘a pretty tight ship’.

But he added: ‘I suspect many of my clients might struggle to get approval for some of the tax-deductible expenses that the prince does.’

Sir Michael Peat said of the report: ‘I hope it shows a good picture. I don’t want to sound complacent but I believe the contribution their royal highnesses make to national life continues to develop and broaden and strengthen.’

Camilla’s cut back on engagements

The Duchess of Cornwall carried out fewer engagements last year than she did in 2006.

Camilla undertook 201 official visits – of which 50 were overseas –compared to 222 the previous year.

However aides rejected criticism that the Duchess was ‘workshy’.

They explained that it was in part due to a period of convalescence following her hysterectomy operation last spring.

Her staff have always insisted she is not a working member of the Royal Family in her own right and that her primary role is to support her husband in his official engagements.

The claim over her special working status also allows them to mask the true ‘cost of Camilla’ in the prince’s accounts.

However, the report reveals that she has two dressers and three members of office staff working for her.

Charles carried out 609 official engagements last year while his 82-year-old mother conducted 440.