Haines on list of most expensive groceries
August 1, 2019
Haines has the fourth most expensive groceries in a list of 12 Alaskan communities, printed in “The Cost of Living” report in July’s Alaska Economic Trends, a state Department of Labor publication.
In the winter of 2018, weekly groceries cost a family of four an average of $262 in Haines, behind Sitka, with an average of $274, Cordova with $303, and Bethel with $396. Fairbanks had the most affordable groceries of any Alaskan community on the list, costing an average of $206 a week.
Anchorage-based economist Neil Fried, who wrote the “Cost of Living” report, said the biggest factor impacting the price of groceries is market size.
“If Haines had 100,000 people, your groceries would be a lot cheaper. I guarantee you. And your location wouldn’t be different,” said Fried. He said it’s a good sign that the cost of groceries in Haines is similar to Sitka, with a population almost four times larger. Fried said the price of groceries in Haines would be even greater if the community was not on the road system.
The average price of staple foods in Haines cost above the nationwide average, but stores offer low-cost brands that owners say are the most popular. Nationwide, the price of a loaf of grocery store bread costs an average of $3.40, according to the Council for Community and Economic Research. In Haines, a loaf of bread can range between $2.99 and $10.00, but the most popular breads sold at both IGA and Olerud’s supermarkets fall into the lower end of the spectrum. The most popular bread brand at Olerud’s, Orowheat, costs about $3.69. At IGA, the popular IGA and Busy Baker brands cost about $2.99.
A gallon of milk in Haines costs between two and three dollars more than the nationwide average, according to the U.S. Department of Agriculture. A gallon of 2 percent or whole milk at IGA and Olerud’s costs between $6.19 and $6.99, while the nationwide average is between $3.21 and $4.06, depending on the type of milk and season in which it is bought.
The Haines Borough Assembly discussed the steep cost of groceries at a meeting in June, when debating whether or not to introduce a seasonally adjusted sales tax rate. At the time, assembly member William Prisciandaro suggested lowering the sales tax rate for staple foods milk, eggs, bread and cheese.
“Growing up in New York, there’s a whole list of stuff that’s exempt from sales tax,” said Prisciandaro.
New York is one of 38 states in the country that offers tax exemptions or reductions on groceries according to the Tax Foundation, an independent tax policy nonprofit.
Prisciandaro said it is too late to add a lowered sales tax question to the fall 2019 ballot, but “as we go forward with all the budget cuts the governor has… I think communities have to look at ways to help their residents.”
“Without losing a ton of income, we could only consider taking that sales tax off food if we had another item that we were going to increase the amount of sales tax on,” assembly member Tom Morphet said. “If we were to change (food sales tax) abruptly, we would lose hundreds of thousands of dollars.”
How much exactly the borough receives in grocery sales tax is not public information.
Morphet said that it bothered him to tax food philosophically: “people can make a very compelling moral argument that sales tax on food takes food out of people’s mouths.” He said he was interested in the idea of reducing or exempting staple foods from sales tax. “I think that would be worth taking a look at.”
There are currently more than 30 sales tax exemptions in Haines, including for non-profits, sales outside the borough and for long-term housing rentals, said finance director Jila Stuart. There is no exemption for groceries, taxed at the boroughwide rate of 5.5 percent, she said.