Category Archives: Personal finance

A newstip that piqued our interest — and our appetites

Some of the candy we purchased in researching this post

About a month ago, a reader called in to deliver a news tip that piqued our interest – and our appetites.

He claimed that a day after the state-mandated sales tax on candy, soda and bottled water was repealed by voters, major grocery store chains upped their prices by the same margin as the tax.

Consumers would fork over the same amount for their M&Ms both before and after the tax was repealed, he said.

In other words, retailers would pocket an extra 9 cents for each package of Reese’s Pieces they sold while the state would simply go without. That was the caller’s hunch.

Had we just stumbled onto Candygate 2010?

We decided to test his theory by looking into whether retailers would charge more for the snacks and water immediately after that sales tax went away.

On Wednesday night, we made trips to Safeway, QFC, Walgreens and a convenience store on Kitsap Way.

At each stop, we picked up a candy, gum and water. We took note of how much the stores charged for soda.

We returned a day later — when stores were told to stop collecting the sales tax —  to buy those same items and compare the receipts.

The caller’s theory didn’t hold up. At three of the four stores, we spent less on our purchases the second day.

But the convenience store charged us $3.90 both times for a package of Wrigley’s 5 Gum, a Three Musketeers candy bar and a 20-ounce bottle of Aquafina. A 23-cent sales tax was tacked on to both purchases.

Despite what we encountered there, state Department of Revenue spokesman Mike Gowrylow wrote in an e-mail that the Dec. 2 transition “has gone smoothly as far as we know” for most retailers.

He said that consumers should demand a refund if stores charge them for a sales tax on candy, gum or water.

If that doesn’t work, they can seek a refund from the DOR, he said.

The bigger problem for the agency is retailers who stopped collecting the tax before Dec. 2. “But we really can’t do anything about that,” he said.

Unfortunately for us, there was no corporate grocery store conspiracy to unravel — but at least we got to eat a bunch of candy.

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Does Voluntary Separation Target Older Workers?

Kitsap County is considering a voluntary separation agreement for its employees as a way to help balance the 2011 budget. The city of Poulsbo recently approved such an agreement.

According to Poulsbo Mayor Becky Erickson, the program isn’t targeted only at employees close to retirement. But both the Kitsap County undersheriff and county clerk on Monday told the board of commissioners they would prefer to see workers close to retirement take advantage of the offer.

Maybe “targeted” is the wrong word, since both programs are strictly voluntary. Both, however, clearly offer employees who have been in their positions the longest the greatest incentive to leave.

Under Poulsbo’s agreement adopted by the council, employees who take the voluntary separation would receive varying payouts based on how long they worked for the city.

Employees who have been with the city for up to five years would receive two months’ pay, those with five to 10 years of service would receive 2 1/2 months of pay and those with more than 10 years’ service would receive three months’ pay.

Under a draft proposal, Kitsap County employees who have worked fewer than 10 years would receive 10 percent of their annual rate of pay up to $10,000; 10 through 15 years, 15 percent with a maximum of $12,000; 15 to 20 years, 20 percent with a maximum of $15,000; and 20 years or more, 25 percent with a maximum of $20,000.

I asked the county’s HR director Bert Furuta how such a program would be expected to affect morale. “OK,” he said. “As long as it’s fully voluntary.”

The county has already made layoffs in addition to leaving positions unfilled. Poulsbo has not yet had to make deep budget cuts, so I’m wondering if the voluntary separation agreement isn’t making folks around city hall just a tad nervous.

I’d appreciate hearing from anyone whose employer has offered a voluntary separation. How was it for those who accepted the agreement? How was it for those left behind?

And for those of you who haven’t had to chance to consider a voluntary separation offer, what would it take to get you out of your position?

Thank you. Chris Henry, reporter

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How Do You Define “Well Off?”

More Money, Money Magazine’s personal finance blog, wants to hear from anyone who falls into the category “well off” and who is facing foreclosure.

The blog mentions a study by the Florida Association of Realtors that cross-referenced three years of foreclosure filings with demographic data. The study found that 20 percent of the filings went to households with more than $100,000 in annual income. Fifteen percent of homeowners had college degrees; another 8 percent went to graduate school.

But what is “well off” anyway? Fifty years ago, $1 had the same buying power as $7.35. Someone with a $100,000 annual income in those days was unquestionably rich. Today, that amount is still considered well-to-do, and yet, the analysis shows, it is not enough to shield families from foreclosure.

The study screened out those who were buying on speculation. These were responsible ordinary folks, well … well-to-do ordinary folks. Thirty-five percent of homeowners who received a foreclosure filing “had lived in their homes for more than 10 years. These were not people who’d bought too much house, but more likely people who lost their jobs and suddenly couldn’t afford the payments.”

These people’s finances, it seemed, died a death of thousand cuts. According to the blog, “it was very rare for just one financial setback to lead to the foreclosure. The group’s vice president of public policy, John Sebree, called this the ‘plus one’ effect: It wasn’t just a high-interest-rate, high-payment subprime loan that might have caused a foreclosure; it was a bad loan and then a job loss. Alternatively, it wasn’t a job loss that caused an affordable loan to go bad; it was a job loss and a health issue.”

And so it goes. Financial stability, it seems, is a three-legged chair, propped up by health, employment and sound financial decisions. How much control do any of us have over any of these factors?

Do you consider yourself wealthy (regardless of where your income falls on the “well-to-do” scale). What is (are) your greatest treasure(s)? How do you protect it (them)?

Chris Henry, South Kitsap/government reporter

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