State Budget Leaders Watching Rising Inflation, Possible Effects
Like Alabama families watching the rising costs for groceries, gasoline and other goods, state officials are monitoring inflation increases that could hurt government budgets and buying power. “It’s certainly going to affect (state spending); there’s no question about it,” said Rep. Steve Clouse, R-Ozark, chairman of the House General Fund budget committee. “Just through the everyday cost of running agencies, transportation cost, it is going to filter down to the state level and we’ll have to compensate for that.” The U.S. Department of Labor this month reported inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010. Meanwhile, inflation at the retail level rose 0.4% in September with its consumer price index up 5.4% over the past 12 months, matching the fastest pace since 2008. Kirk Fulford, deputy director of the Legislative Services Agency, said there was increased demand for goods and services this year, which, coupled with the huge amount of stimulus funds provided to citizens, will cause prices to rise. “Everything will cost more, from gas to groceries to inputs to production, which will put increased pressure on wages and salaries to keep up with costs,” Fulford said. “This is even heightened when the labor market is tight. You can see this now in many work environments.” Read more.
