News from Aug.
18, 2005 issue
Soaring gas prices hit home
Nobody's happy at the gas pump these days, and the long-term outlook
isn't pleasant either.
Gas prices have gone up about 30 cents a gallon over the past
several days, and some think it could spike to $3.25 or $3.50
by year's end. Forecasters are already warning that winter heating
costs will be elevated.
Crude oil dropped slightly to $66 a barrel by the middle of the
week, but analyst outlooks aren't good for consumers.
The Associated Press reported Wednesday morning that prices would
continue declining in the short-term, as the summer driving season
draws to an end and the U.S. shows healthy stocks of crude. But
higher prices would prevail in the long-term with the approach
of winter and uncertainty over the U.S. refinery situation, Iran's
nuclear showdown and news that protesters had shut down a pipeline
in Ecuador. Crude oil prices continue at record highs, last week
nearly $70 a barrel.
For every $1 increase on a barrel of oil, customers are realizing
10 cents extra per gallon at the pump, said the owner of a local
gas station.
"I don't see it letting up for a while," said Bobby
Gilland, owner of Liberty Fuels BP in Marion. "I've been
in business since 1993, and the same load that cost $4,300 then
was $21,000 this week."
While it hurts to shell out $40, $50 or more for a full tank of
gas, Gilland hasn't seen a decline in sales.
"A lot of people say they're cutting back driving, but I
track gallons of gas and I haven't seen the volume drop off."
High fuel prices have prompted a few lifestyle changes for people
around Marion. Some are hopping on motorcycles more often than
getting behind the wheel of a 4x4; some are walking more than
driving a few blocks; and at least one school administrator is
trading vehicles and spending a couple of nights a week in Marion
to eliminate commutes from Ledbetter five days a week.
But perhaps the hardest hit are haulers like Gary Cruce and trucking
companies like Henry and Henry or Martin Tire, whose businesses
are built on the road.
"It's hard for me, and we're all paying more for parts or
tires, because when gas prices go up everything else does. It's
a domino affect," said Cruce.
He doesn't raise delivery prices every time gas goes up. However,
he did up his rates when fuel went past $2.45 per gallon.
Cruce's company hauls rock and sand from Marion and Fredonia quarries.
His average fuel bill is $300 to $400 a day.
Crittenden County native Depeka Croft, who lives in Ledbetter
but works in the local school system, is prepared to trade in
her one-year-old Nissan Murano for a more cost-efficient vehicle.
"We've been looking, at either a Honda Civic or Toyota Camry,
and we're definitely trading," said Croft, who has been staying
one or two nights a week at her parents' Marion home to cut down
on fuel usage.
"It's ridiculous," Croft said. "We're hearing stories
about people using more of their paychecks (on gas), and that
it doesn't leave much to pay bills. It's a shame, really, that
we're getting to that point."
Vicki Davidson, who put $41 of gas in her car Tuesday, said she's
cutting back in several areas.
"I'm not buying near as many other things, and I've started
walking to the post office," she said. "I guess soon
I'll be walking to the store."
On the other side of the gas pump, David West filled up his work
vehicle. While his motorcycle isn't always the most practical
mode of transportation, West said he's riding it more often.
"It holds four gallons and will go a couple hundred miles,"
West said.
For a college student commuting three days a week to Madisonville,
gas prices are cutting deep into Scott Belt's wallet. Belt, who
works at Hodge's in Marion when he's not at school, said it's
costing him between $50-$100 a week for fuel.
He is considering buying a small car that would be better on gas
than his V-8 Chevy.
"I used to go back and forth to home for lunch, but I quit
that," he said. "Eating the dollar menu at McDonald's
is cheaper."
Janet Westendorff, a clerk at Liberty Fuels, said this is one
time in her life she's glad she lives close to work.
"My husband drives 100 miles a day," she said. "He
doesn't ever let his truck get completely on empty, but when he
fills it up usually every other day it's about $40.
In her position behind the counter at the gas station, Westendorff
hears plenty of customers' comments about rising gas prices. The
highest price she's seen a customer pay for a full tank was $74
earlier this week.
Jason Berry and his father-in-law Randy Poindexter run a timber
business, and like so many small business owhers, they're seeing
fuel prices increase but profit margins decrease.
"A sawmill pay whatever they want for logs, and if log prices
are down and fuel is up, our profit margin decreases but
we've just got to keep doing what we can do," he said.
Gilland says the gas business isn't as enjoyable as it once was.
In fact, he says if he were prepared financially, he'd close his
gas station.
"I used to enjoy this," he said. "Gas stations
didn't gauge people but they made a decent margin, but the last
two years haven't been fun. The (profit) margin has decresed and
costs are increasing.
"Revenue is way up this year, but financially I'm in worse
shape than I was this time last year.
"A lot of people think fuel retailers make the money, but
they're taking a beating, because really the cheaper gas is the
more we make off it and people don't understand that."
Health tax proposed at 2 cents
It's time for local governments all across Kentucky to set their
annual tax rates. In Crittenden County one rate is up slightly,
most tax rates are staying the same and there's a proposal for
a new health department tax.
The idea of a tax to support the local health department surfaced
earlier this year when the Crittenden County Health Board recommended
the adoption of a two-cent countywide tax. The proposal became
official Tuesday when the Crittenden County Fiscal Court including
the health tax in its tax ordinance for 2005.
Crittenden is one of 11 counties in Kentucky that does not currently
have a health tax to help fund its county health department. The
average county health tax across the state is 3.1 percent.
The local health department is operated by the Pennyrile District
Health Department which also serves Caldwell, Livingston, Lyon
and Trigg counties. Trigg is the only county in the district,
other than Crittenden, which does not have a public health tax.
Livingston has a two-percent rate and Lyon and Caldwell each has
a 2.3-percent property tax.
Crittenden County has a statutory requirement to fund the health
department either through a tax or from the county's general fund.
The health department needs about $60,000 to operate.
Judge-Executive Fred Brown said that the county's general fund
is strapped, and in fact, told magistrates Tuesday to put a freeze
on any road improvements for this fall because the county's resources
are limited.
"I told the health board back in May that the county just
can't make its annual contribution from the general fund any longer,"
Brown said. "If we did, we'd have to close fire departments
in order to come up with the revenue."
The fiscal court proposed taking a slight increase in the county
property tax from 11.7 cents per $100 of assessment in 2004 to
12.0 cents this year. No other changes were recommended in the
county's tax rate structure. The rest of the rates for boats,
cars and personal property such as heavy equipment will stay at
12.4 cents.
There will be a public hearing at 9 a.m., Thursday, Sept. 1 at
the Crittenden County Courthouse to seek public input on these
proposed tax rates.
Tax bills are sent out each October and are due by the end of
the year. Those who pay their bills early get a small discount.