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Relentless Drive For Oil Company Profits Threatens Overall Economy

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The higher oil prices are a threat to America's overall economy and the skyrocketing costs of heating public facilities and keeping school buses, police cars, emergency vehicles and snowplows running are wreaking havoc on local governments all across the country.

For example, in Charlotte, SC, each one cent increase in a gallon of gas means a $70,000 increase in annual fuel costs to the city budget, according to a report distributed at the League of Municipalities Conference, on October 17, 2005.

According to district administrator, Lois Cuff, the small school district of Freedom Wisconsin, came up $100,00 short for heating bills in 2005. The district budgeted $135,00 to heat the school buildings but the actual bill topped $233,000.

To help cover the increase in heating costs, Freedom was forced to pull $87,000 from accounts that supply funding for equipment, athletic uniforms, copy paper, staff travel, student field trips and upgrades in technology.

"Buildings must be kept at a reasonable temperature, " Cuff said. "These are costs that are out of our hands in many ways. "

Local governments are scrambling to find ways to cut costs. In Rhea County, Tennessee this week, about 3,800 school children got 2 days off of school to save money on transportation expenses.


Brad Harris, Finance Director for Rhea County said schools spent $14,000 on fuel in March 2006, compared to $7,800 in March 2005, and that year to-date-spending was up from $68,000 to $102,500.

Fuel prices are already taking a huge slice out of family budgets but higher prices also mean paying more elsewhere as businesses are forced to pass on the increased costs.

The nation's small businesses that depend on deliveries are feeling the squeeze. Businesses like floral shops, pizza parlors, taxi drivers are finding it hard to make ends meets.

On March 29, 2006, the city of Seattle, Washington authorized a fuel surcharge of 50 cents per trip for taxicab trips originating in Seattle. The surcharge will also be added to the $28 flat rate charged for the trip to the airport from downtown Seattle.

In Lafayette Indiana, since September 27, 2005, Star Taxi & Courier, has had a temporary surcharge of $1 in effect. In March 2006, the city moved to discontinue the surcharge and increase the flat fee from $2.50 to $3.50 since gas prices had not decreased since September.

Fernando Mateo, spokesman for New York State Federation of Taxi Drivers, wants to charge passengers a $1.50 surcharge to help with the cost of gas now, and if the price hits $4 a gallon, the taxi drivers wants a $2 dollar surcharge.

On February 14, 2006, Montgomery County, Maryland made permanent a $1.50 per trip increase for cab rides in effect since September 2005, to provides relief to cab drivers.

Late last year, Business Know-How, interviewed a number of small business owners to see how they were affected by rising gas costs.

At Royal Pizza in Centereach, New York, the manager said the rising cost of gas has seriously affected the business: "Rising oil prices have affected not only our delivery costs;" she told Business Know-How, "but it has also affected just about all our costs: cheese, flour, boxes, soda. The distributors are charging us more because their costs are higher as a result of rising oil prices."

"Our pizzas used to sell for $3.99 a pie," said the manager, "and because of higher gasoline prices, we've had to raise our prices; most recently in 2003, and again in 2005; now a pizza costs $6.90."

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Evelyn Pringle is a columnist for OpEd News and investigative journalist focused on exposing corruption in government and corporate America.
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When the credit runs dry, the economy will make th... by Lisa W. on Tuesday, May 2, 2006 at 12:31:03 PM