Thread: The economy is down, but the cost of living is going up

Saturday, May 23, 2009

The economy is down, but the cost of living is going up

By Loretta Kalb and Sarah Frier
lkalb@sacbee.com

Comments ( 92 )
Published: Friday, May. 22, 2009 - 12:00 am | Page 1A
Last Modified: Friday, May. 22, 2009 - 12:28 pm

It's not your imagination.

Your wallet is taking a bigger hit in today's economy.

Registering your vehicle? The cost just jumped. Headed to college? You'll soon have to dig deeper to pay higher fees.

Even mailing a letter is costing you more.

Just as families schooling themselves to live on less are starting to make headway, the rising cost of many necessities is delivering a new financial punch.

"If you look at the consumer price index, you would think that the cost of living is very low," said Sung Won Sohn, professor of economics at California State University, Channel Islands. "Unfortunately, that is not the case. The cost of living for the average person is going up."

Just ask Alex Serna of Sacramento.

Serna, 29, finally got a job as a part-time worker at a gas station after being laid off. But even with the new income, the new expenses are a heavy hit.

"It's hurting us at the house," Serna said. "And whatever they say you owe, you owe."

Serna can't really eliminate necessities like electricity from his life. And he's likely to see higher rates later this year.

In September, directors of the Sacramento Municipal Utility District are expected to raise electricity rates either by 9.5 percent or 5.5 percent. Either way, the hit to customers will equal or exceed 13 percent because of additional increases proposed over a 16-month period. The new monthly SMUD bill? For the average residential customer, it could jump as high as $86.22 in September, up from $77.88.

Spokesman Brian Swanson of Pacific Gas and Electric, which provides natural gas for Sacramento County and gas and electricity for the rest of the region, said gas rates are volatile and seasonal. Rates went down from the high levels of 2008 when the price of oil dropped, but PG&E expects gas rates to rise again later this year and next year.

PG&E raised electric rates 5 percent in March and doesn't expect to raise them again until Jan. 1. In the meantime, Swanson worries about customers being able to pay after using air conditioning this summer.

"Bills are going to increase, and we're going to see an increase in the number of consumers having trouble paying," Swanson said.

But all is not gloom for consumers.

Some companies are helping. SMUD encourages energy conservation. PG&E has several programs to help people pay or plan for their bills.

Carolyn Laplante takes advantage of reduced utility rates because she's disabled.

"Without the lifeline rates, I probably wouldn't be able to pay my bills," Laplante said.

And some big items cost less than they once did.

Domestic and foreign automakers are offering incentives on new cars that are the most lavish in years.

California's median home sales prices are about $250,000. That's far less than the $561,350 midpoint price the California Association of Realtors reported in March 2006.

Still, other necessities such as transportation, gasoline and haircuts do cost more.

"Certainly government services are going up, including taxes," economist Sohn said.

And businesses that provide services – such as auto repair businesses and hair salons – are seeing their costs rise, too.

In many cases, consumers have little or no choice but to pay basic bills. And they tend to have to pay the going rate.

Among the examples:

• On Tuesday, California's vehicle license fee nearly doubled. Now the owner of a $20,000 vehicle must pay a $231 fee, up from $131.

• The cost of boarding a bus is up. Sacramento Regional Transit raised fares in January, boosting the fare for bus and light rail to $2.25, up from $2. Monthly passes went up from $85 to $100. Prices for student and senior passes rose too.

• Sacramento-area cities and counties have imposed a range of fee increases. Water rates are higher for Placer County Water Agency customers. Garbage rates are higher in Sacramento County. Some sewer rates are headed higher in Elk Grove, Citrus Heights and Rancho Cordova and portions of other cities.

• Postage stamps saw a 2-cent increase May 11. And U.S. Postal Service spokesman Gus Ruiz said we haven't seen the last of it.

"We'll do this on an annual basis, to rise in May one or two cents," he said.

• University of California regents this month raised student fees 9 percent for the next academic year. Students at the California State University system face a 10 percent increase.

• Most retail purchases now cost more: The state sales tax rate climbed one percentage point on April 1. The new rate reached 8.75 percent in much of Sacramento County and 8.25 percent in Placer County. The city of Galt's new half-cent anti-gang tax pushed that city's rate to 9.25 percent.

• Parking your car in downtown Sacramento is more costly. The city raised the rate last July to $1.25 an hour.

Sacramento resident Kevin Hartung sometimes can't avoid Sacramento's parking meters. And he can't skip the rent checks. So he has two jobs: part-time UPS worker by day, bartender by night. He tries to scrape as many hours out of them as he can.

"And I'm trying to eat from the grocery store, and recycle," he said.

Hartung and others have found ways to save more or earn more while facing higher costs.

James Johnson, a Sacramento utilities worker, tries to ride his motorcycle more often than he drives his truck.

Tyrone Allen Jr., who's in the music business, said he resists turning on the air conditioner.

"Everything has gone up," he said.

http://www.sacbee.com/topstories/story/1883489.html

it's not that the cost of living is going up; but rather the value of the dollar is going down from printing monopoly money

we seem to be burning those printing press's up ...... jus like Wiermar Germany .... woooooooooooo hoooooooooooo

go get them Helicopter Ben Bernanke

the value of the dollar is going down from printing monopoly money

Instead of printing more money, they should just confiscate all "Monopoly money" and declare it as legal tender!!!

we seem to be burning those printing press's up ...... jus like Wiermar Germany ....

Yep, and history repeats itself once again!

well, Ive seen our quality of life go way down the last few years....

I feel like we work (and have worked) for nothing sometimes.