PAI-IB0802

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Issue Brief 0802 May 2008

Some Necessities Cost More, Others Don’t
by Paul Cillo and Doug Hoffer
Average Vermont families have good reason to feel that the cost of living is going up. Their buying power increased from the mid-1990s to the mid-2000s. But it didn’t grow as much as many of their biggest-ticket needs, such as health insurance, heating fuel, and housing. The chart below shows changes in the cost of common household expenses between 1996 and 2006, the most recent decade for which data are available. For comparison, the red bar shows the change in median family income. The cost of items above the red bar grew faster than the typical family’s income; those below it grew slower. The cost of health insurance, for example, jumped 130 percent, two and half times the increase in median income. The rise in fuel oil, natural gas, and gasoline also outstripped the increase in buying power. The change in food costs doesn’t reflect the current spike in prices worldwide. During the period covered by the chart, food became more affordable for the typical family. School taxes for the typical family also increased less than income.

Figure 1. Change in Vermont household costs, 1996 - 2006 Change in Vermont household costs, 1996 - 2006
Basic cable TVTV1 Basic cable 1 HealthHealth insurance2 Insurance 2 Fuel oil oil3 Fuel 3 Natural gas 4 Natural gas4
Median value home price5 Median value home price 5 Gasoline6 Gasoline 6

138% 130% 126% 122% 104% 88% 74% 64% 63% 47% 46% 45% 44% 40% 36% 29% 23% 22%

Round-trip Average

Round-trip airfare Burlington-Boston7 airfare Burlington-Boston 7

Driver’s Rental

Driver's license fee8 License Fee 8

Average municipal tax on Vermont home9 municipal tax on Vermont home 9 Rental Housing - Chittenden Co.10 housing - Chittenden Co. 10 Vermont income bill 11 Vermont income taxtax bill11 Vermont average wage12 Vermont average wage 12 Median household income13 household income 13

Median Car Average Rental

Car registration 2 years 14 registration fee -fee - 2 years14

Average school tax on Vermont home15 school tax on Vermont home 15

Rental outside Chittenden Co. 16 housing - housing - outside Chittenden Co.16

FoodFoodhome 17 at at home17
Electricity18 Electricity 18

0% 0%

20% 20%

40% 40%

60% 60%

80% 100% 120% 140% 160% 80% 100% 120% 140% 160%

PAI-IB0802

Public Assets Institute END NOTES
1 11

2 Vermont tax on median household income (married, filing jointly), Vermont Department of Taxes.
12

The Hanson Index. Based on costs from Adelphia and Comcast.
2

Blue Cross Blue Shield, 4/21/08 communication; Vermont Freedom Plan, $2,500 deductible.
3

Vermont Department of Labor, Quarterly Census of Employment & Wages, unemployment insurance- covered employment.
13

U.S. Department of Energy, Energy Information Administration; #2 fuel oil, cents/gallon; data from December 1996 and December 2006.
4

U.S. Census Bureau, Table H-8B; three-year moving average adjusted with CPI-U-RS.
14 15

Vermont Department of Motor Vehicles

U.S. Department of Energy, Energy Information Administration; residential cost /1,000 cubic feet.
5 6

Vermont Department of Taxes, property transfer tax.

Authors’ calculations: average tax on house with less than six acreas, data from Property Valuation & Review, equalization studies.
16

U.S. Department of Energy, Energy Information Administration; Northeast average cost for regular gas (not reformulated); data from December 1996 and December 2006.
7

U.S. Department of Housing & Urban Development, Fair Market Rents; weighted average for all Vermont counties except Chittenden.
17

The Hanson Index. Based on tickets purchased 14 days in advance with a Saturday stayover.
8 9

U.S. Department of Labor, Bureau of Labor Statistics, CPI-U “food at home” for cities under 50,000; not seasonally adjusted.
18

Vermont Department of Motor Vehicles

U.S. Department of Energy, Energy Information Administration; average statewide cost (cents/kWh). Deb Brighton also contributed to this report. This research was funded in part by the Annie E. Casey Foundation and the Public Welfare Foundation. We appreciate their support. The findings presented in this report are those of the Public Assets Institute and do not necessarily reflect the views of our funders.

Authors’ calculations: average tax on house with less than six acreas, data from Property Valuation & Review, equalization studies.
10

U.S. Dept. of Housing & Urban Development, Fair Market Rents; Chittenden County.

PO Box 942, Montpelier, Vermont 05601 802-223-6677 www.publicassets.org

The Public Assets Institute supports democracy by helping Vermonters understand and keep informed about how their government is raising and spending money and using other public assets.

© 2008 by Public Assets Institute

PAI-IB0802

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