'European' gas prices hit Midwest
Filling up at the pump these days can make even the friendliest Midwesterner ill-tempered. But for those whose busines-ses are on wheels, the prices affect more than disposition.Skip to next paragraph
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"We don't charge for delivery, so it's definitely taking away from our profit," says Linda Felician of Connelly Interiors, an upscale furniture store in Whitefish Bay, Wis., just north of Milwaukee.
With gas at $2.07 a gallon, it costs the firm nearly double to fill its delivery van. That's $120 a week at local Mobils.
"You can't pass that on to the client. You just have to eat it," says Ms. Felician, fluffing a velvet pillow on a chair.
Small businesses - from taxis to balloon-delivery services - are among those affected most by the highest gas prices in history here.
While federal investigators probe what's behind the $2.25 prices at the pump -pollution-control additives? refinery problems? price-gouging? - those who drive vehicles for a living just want the arithmetic to change.
Chicago and Milwaukee, in fact, offer a painful window into the closest thing the United States has to European-level energy prices. True, it's not exactly the same. In Europe, they're closer to $4 a gallon, and in the past few days, prices have eased off about 25 cents a gallon here.
But the prices are still about as close as many small businesses want to come to those in Brussels or Budapest.
Take Aaron Juliano. He reaches into his truck and pulls out a dolly. The icy blast from his refrigeration unit fills the air with the scent of seafood.
He is making his daily delivery at a downtown Milwaukee restaurant for Houmann's Fish and Seafood out of Racine, Wis.
His delivery truck uses diesel fuel, which hasn't been subject to price hikes as dramatic as unleaded gasoline has. Still, it hurts.
He figures he stops every 1-1/2 days to fill up his two tanks. The going rate for diesel in Wisconsin is $1.60, and he is glad not to have to pay the unleaded prices. But unlike some, his company is passing on the increased fuel prices to customers.
"The price of squid rose by 20 cents a pound. And other prices have gone up as well," he says. "You are starting to see that everywhere."
While he can't stop making deliveries, he has changed his own driving habits: He's eased up on visiting friends far from home. "I used to go down to south Milwaukee all the time," he says. "Not anymore."
With the summer travel season in full swing, some vacationers may be following Mr. Juliano's lead and sticking closer to home. Others, with plans already in place, are simply paying more to get where they are going.
Steve and Linda Neujahr, from York, Neb., are snapping photos of each other beside Lake Michigan. The two are in Milwaukee for the annual Harley Davidson rally, and because they had tickets to the event far in advance, the price of gas didn't deter them from making the trek.
Where they started their trip in Nebraska, gas was $1.74 a gallon. They've paid as much as $2.04 a gallon in Milwaukee.
"It's not as bad with motorcycles," says Mr. Neujahr. "But we've got two of 'em." Tattoos peak out from under his bright orange Harley Davidson T-shirt, the logo covered slightly by his salt-and-pepper beard. "So it still hurts."
But not as much as it could, adds Mrs. Neujahr. "We're smiling as we pass SUVs. We've got it much better than they do in a lot of ways."
While businesses can pass on price hikes and travelers can cancel trips, cities still have to provide services - no matter the cost.
Chicago and Milwaukee are getting hit the hardest. While city officials aren't panicking yet, they are watching the price of gas as closely as Sammy Sosa's home-run total.
"We are still going to patch potholes," says Roseann St. Aubin, in Milwaukee's Department of Public Works. "We are still going to do paving and pick up garbage, and all those services that we normally provide will be provided."
Chicago projected it would use more than 3 million gallons of diesel and almost 4.5 million gallons of unleaded in 2000. If prices remain high, the city could be facing a $4.6 million deficit. But with an overall budget of $4.3 billion, budget director Mike Harris is not overly concerned.
"We are doing some reallocating of funds in the short term," he says. "But police have to be on the street no matter what, and garbage still needs to be picked up."
The city has already spent $3.4 million more on gas than expected, but when other recent disasters are taken into account, things could be worse. Last year, a snowstorm caused a $40 million hit to the budget.
Still, it has only been a few weeks. "We may reach a point where we have to get clever to get the cars out the door if the bills keep coming in," says Mr. Harris.
Other institutions are starting to think about clever accounting as well. The Milwaukee school district, for instance, spends more that $58 million a year on bus contracts. Those numbers will likely go up this fall, and district administrators are already thinking they may have to dip into reserves.
(c) Copyright 2000. The Christian Science Publishing Society