Local grocers welcome an additional 1 percent decrease in the state's sales tax on food

Thursday, 06/19/2008

The tax dip from 4 percent to 3 percent goes into effect July 1. State officials estimate the 1 percent decrease equates to about $25 million in annual savings to consumers. "I would say it's a good things in today's world," said Gary Traugh, owner of several area Kompak stores. Traugh points out the estimated $25 million in savings may be a big number, but to consumers seeing a decline of 1 percent on some food purchases it's a small amount. The tax dip from 4 percent to 3 percent goes into effect July 1. State officials estimate the 1 percent decrease equates to about $25 million in annual savings to consumers. "I would say it's a good things in today's world," said Gary Traugh, owner of several area Kompak stores. Traugh points out the estimated $25 million in savings may be a big number, but to consumers seeing a decline of 1 percent on some food purchases it's a small amount. Foodland owner Jim Oppe agrees that any decrease is a good thing. "It has been a systematic drop," Oppe said. "I'll give the administration credit. That was one of their goals and they have worked at it." The tax has been reduced from 6 percent in 2006. Gov. Joe Manchin championed the decreases in the tax, which was passed by the Legislature in 2005, although some clamored for a quick or total elimination of the tax. The 1 percent decrease is the last scheduled decrease. However, the tax could go down more. Manchin said he favors elimination of the tax if the state can afford the loss of revenue and if the decrease is done in a gradual, responsible manner. "The governor does support the responsible reduction of the food tax, but at this point there are no plans in place beyond this new cut until we can do it responsibly, because it has to be sustainable and each percentage point is at least $25 million in our base budget," Manchin spokeswoman Lara Ramsburg said Wednesday. The decrease may be a drop in the bucket compared to the rise in corn and potato prices because of the floods in the midwest. Oppe said corn, which cost $3 a bushel last summer, is now pushing $8 a bushel. Oppe said some economists are speculating the price could reach as high as $16 a bushel. Corn is a staple involved with thousands of products from the corn syrup in soda to feed for cattle and poultry. "Everything helps right now," Oppe said. "The situation, especially in the midwest right now, is going to create some shortages in some products." Oppe said the price increases have hit grocers yet, but the shortages will result in price increases. "We will see some pretty stiff increases this summer and fall," Oppe said. The Associated Press contributed to this report.   *****************************************************   Also today an article in the same paper : Credit Cards Costly for Gas Stations.   Link to read:  http://www.newsandsentinel.com/page/content.detail/id/506489.html?nav=5061

 

< Prev		Next >