KEEFE INCREASES PRISON COMMISSARY PRICES IN IDAHO 5% ACROSS THE BOARD


In an email to IDOC prisoners dated April 25, 2018 (reproduced below), Keefe Commissary Network made the decision to increase prices of all commissary goods by 4.9% (we'll have to call that 5% guys - really... how stupid do you think we are ... never mind - don't answer that...). While that 5% increase might be an increase of 5 cents on the dollar using street math, let's use some prison math shall we?

Let's say that an item - we'll call it a Widget - costs Keefe (wholesale) 40 cents. On the street, this item would then retail at somewhere between 90 cents and one dollar, but in Idaho prisons - based on the contract Keefe has with the IDOC, Keefe can charge more than what you would pay if you were to purchase the item retail at the most expensive "convenience" store in the state. That 40 cent widget will now be retailed to prisoners at the price of right around $1.75 - - - but wait, there's more!

On top of the retail price, IDOC adds another 25% for their take, bringing the price of the widget to $2.19, plus sales tax of 6% - with a total price of $2.32, but wait a minute - let's go back - notice that the sales tax is being charged not only on the cost of the widget ($1.75), but on the cost of the widget AND the 25% IDOC kickback! If the 6% sales tax was charged just on the cost of the widget, my sales tax total would be $0.105, or ten and a half cents, but charging the sales tax on the kickback (OK, they want to call it a "commission") on the widget, and I'm now paying $0.13 in sales tax - a (lemme get it right...) 25% increase on sales tax over the statutory 6% rate (Idaho Code 63-3619), making the tax rate charged to prisoners 7.5%.

To make matters worse, Keefe, despite Idaho statues prohibiting it, is once again using line-item calculations when figuring sales tax on prisoner purchases. Line-item sale tax calculations mean that Keefe charges the 6% sales tax on EACH of the items (plus IDOC "commission") in the order rather than calculating the 6% tax on the entire order. To illustrate, if you were to go the grocery store and bring a loaf of bread, a carton of milk and a box of cereal, the cashier would ring up each item, calculate the sum total, and charge 6% on the taxable items. Keefe on the other hand is taking the price of the bread and charging 6%, taking the milk, and adding 6% then the cereal and adding 6% then summing the total of those numbers. In addition to being illegal (Idaho Code 63-3619 (c)), this line-item method often over-charges the customer between 1 and 5 cents per order in favor of the retailer.

Several years ago, I filed a lawsuit against Keefe Commissary Network for doing exactly this (line-item calculations) and their defense was that someone at the Idaho State Tax Commission told both Keefe and the IDOC that they could do this. While the Tax Commission told me that there was no exception for Keefe or IDOC, and that it was completely unlawful for them to use line-item calculations, the Court ruled that Keefe had a "reasonable belief" that it was not violating statute because some guy at the tax commission sent them an email saying it was OK to do. I understand that this [tax commission] guy was soon thereafter fired, and went to work for... yep, you guessed it.

Because Keefe was put on notice that this line-item calculation of state sales tax was unlawful, they stopped doing it - at least for awhile - but now they are doing it again. Would it be alright if the money actually went to the tax commission? Well, that's an argument we do not need to have because Keefe does not PAY the tax commission using the line-item calculated rate, they simply declare total sales of taxable goods over a specific period of time and pay the 6% rate on THAT amount. Based on sales over the entire IDOC, that "extra" money they collect - a few pennies at at time - constitutes thousands of dollars per year. Then the question becomes, is Keefe actually paying the (extra 1.5%) sales tax charged to prisoners on the 25% IDOC commission?

Keefe says in their email that this 5% increase is due to (blah, blah, blah...), so let's find out. If you know someone in a different state that Idaho, or in a jail or other facility who is "served" by Keefe Commissary Network, ask him or her if they have experienced any price increase in goods this year and post it on this page. You'll also find their "justification" in their email as to why and how much they are raising prices. If you have a minute - please check their claims. DS 

MSG FROM IDOC - KEEFE

To: IDOC Inmates
From: Keefe Commissary
Date: April 25, 2018

Subject: Pricing changes

To whom it may concern:

Please be advised that due to rising costs over the past two years Keefe Commissary must institute new pricing. The percentage increase we have requested is solely based on the Consumer Price Index for all Urban (CPI-U Table 4, West Urban and Size B/C) as published by the U.S. Department of Labor, for establishing the percentage of change to pricing.

We understand the impact price increases have on our customers and have demonstrated this understanding by holding the line and not instituting increases last year. Unfortunately as we can no longer continue to do so, a 4.9% increase representing Feb 2016-2017 2.4% and the Feb 2017-2018 2.5% (added together) across all Commissary and Property items is scheduled to go into effect on May 9, 2018. The same increase for SecurePak will go into effect when the new menu starts July 1, 2018.

Thank you in advance for your understanding in this matter.