Santana: Lawmakers Should Not Rush Into Repealing Item Pricing Law

Lawmaker calls for state leaders to take closer look at Michigan's consumer protections
Tuesday, February 15, 2011

LANSING – State Representative Harvey Santana (D-Detroit) today criticized legislation passed by the House Commerce Committee that would leave Michigan residents vulnerable to price gouging and fluctuating prices by repealing Michigan’s item pricing law. He also questioned the alleged $2.2 billion cost that opponents claim is associated with the law and urged lawmakers and elected officials to take a closer look at the issue before fast-tracking the plan.

“I believe it is irresponsible and unacceptable that this plan is being rushed through the Legislature,” Santana said. “This has been one of our most effective consumer protections for more than 30 years, yet some elected officials are ready to throw it away based on a flimsy, unproven number that is being tossed around as if it is fact. While I agree that our state and consumers could benefit from reforming or modernizing some of our retail practices, we can’t hang Michigan families out to dry by removing safeguards that protect them from things like accidental overcharging and price gouging.”

The plan to repeal the item pricing law, which passed the House Commerce Committee today, is expected to be voted on in the House of Representative this week. The new legislation will repeal the Item Pricing Act, a key consumer protection that helps shield residents from price gouging by requiring that the prices of individual consumer products be clearly and conspicuously labeled. For more than 30 years, Michigan’s item pricing law has helped ensure that Michigan residents are not exploited or overcharged by retailers.

Santana today called into question a commonly cited report that states eliminating Michigan’s item pricing law will save the state and consumers $2.2 billion. That claim is based on an earlier report that found that groceries in states with item pricing laws cost an average of 8 to 10 percent more than in states without similar laws. Those percentages were then factored in to the $24.3 billion that Michigan consumers spend annually on groceries to produce the $2.2 billion estimate.

Santana and his staff members recently conducted their own price comparison at grocery stores in Michigan and Ohio, which does not have an item pricing law. Comparing prices of a number of the same 165 items used in the original study, they found prices in Michigan were 0.1 percent lower than in Ohio.

“The study that the $2.2 billion figure is based on was done in New York, New Jersey and Connecticut – not with products sold in Michigan stores,” Santana said. “We need a legitimate study that takes into account all products sold in Michigan that are subject to our item pricing law to produce a true cost of this law, if any. Especially at a time when our elected officials should be focused on creating jobs, turning Michigan around and supporting our working families, lawmakers must do their due diligence to make sure we are working on quality solutions, not rushing through flashy political stunts.”