Wal-Mart's Subsidy Shopping
http://multinationalmonitor.org/mm2004/05012004/may-june04front.html#walmart

Wal-Mart, the world's largest retailer, has benefited from more than $1 billion in economic development subsidies from state and local governments across the United States, according to a new study by Good Jobs First, a Washington, D.C.-based research group.

"Wal-Mart presents itself as an entrepreneurial success story, yet it has made extensive use of tax breaks, free land, cash grants and other forms of public assistance," says Philip Mattera, research director of Good Jobs First and principal author of the study.

The study, the first comprehensive national examination of subsidies received by the giant retailer, found more than 240 cases in which the construction of new Wal-Mart facilities was assisted by public resources.

In addition to 160 retail outlets, the study found subsidies at 84 of Wal-Mart's distribution centers, representing more than 90 percent of the network of huge warehouses the company has built to facilitate its rapid expansion.

The publicly evident value of subsidy deals for individual distribution centers ranged as high as $46 million (with an average of more than $7 million), while for retail outlets the largest was $12 million (with an average of $2.8 million). Wal-Mart subsidy deals were found in 35 states, with the largest number in California, Illinois, Missouri, Texas and Mississippi.

In total dollar terms, Louisiana, Florida and New York also ranked high. Although comparative data are not available, the study says it is likely that Wal-Mart, given the extent of its operations, receives state and local subsidies from more jurisdictions than any other corporation in the United States.

"That a company with $9 billion in profits can wrest job subsidies from state and local governments shows that the candy store game has gotten out of control," said Greg LeRoy, executive director of Good Jobs First.

Wal-Mart's annual revenues top $256 billion. It has more than 5,000 stores worldwide, roughly two thirds in the United States. The company has doubled its number of U.S. stores since 1990, and plans to open 300 new or expanded stores in the United States in 2004.

The subsidies to Wal-Mart are particularly troubling, the report argues, given that the company uses taxpayer dollars to create jobs that tend to be poverty-wage, part-time and lacking in adequate healthcare benefits. The report notes as well that retail jobs do not have an economic impact comparable to manufacturing -- where new manufacturing creates new jobs, retail openings do little more than take revenues from existing merchants, since the store opening does not increase the disposable income of shoppers.

Mattera stresses that the $1 billion figure is an understatement, since disclosure of economic development subsidies is poor in most states.

"We had to track down subsidy deals using sources such as archives of local newspapers," Mattera says. "Then we had to interview hundreds of public officials to confirm the facts and seek additional details, which sometimes were not available. While it was not practical to contact officials in all of the more than 3,000 U.S. communities in which Wal-Mart has stores, we did contact officials in every one of the 91 places in which the company has its distribution centers. The fact that we found subsidies in more than 90 percent of the distribution centers suggests that the true extent of subsidies for stores is much higher than the rate we could find with our indirect methods."

The types of subsidies given to Wal-Mart projects included:

Free or reduced-price land. More common for Wal-Mart distribution centers -- some of which require more than 100 acres -- land giveaways have been worth as much as $10 million for a single project.
Tax increment financing, a diversion of property (and/or sales) tax generated by a new development;
Property tax abatements. In some cases, Wal-Mart avoids property taxes indefinitely by letting ownership of the facility remain with public authorities, making it tax exempt.
Other categories of subsidies included: infrastructure assistance, including access roads and water/sewer lines; state corporate income tax credits; sales tax rebates or exemptions; enterprise zone status, which typically provides for a menu of subsidies such as property tax abatements, state tax credits, sales tax exemptions and reduced utility rates; job training and worker recruitment funds; tax-exempt bond financing; and general grants, including outright cash payments to the company.

The study points out that Wal-Mart proceeded in many instances to open stores without subsidies. "The fact that Wal-Mart often proceeded with such projects without subsidies suggests that the company did not seek the assistance out of financial need," Mattera says.

Good Jobs First urges that states and localities generally deny subsidies to Wal-Mart. "Given the poor quality of the jobs that tend to be created and the role that big-box stores play in contributing to sprawl, we suggest that states prohibit subsidies to retailers such as Wal-Mart unless strict conditions are met," LeRoy says. "First, the subsidies should be available only in economically distressed areas that are demonstrably underserved by retail outlets for necessities such as food. Second, any retailer receiving subsidies should be required to pay its employees a living wage."

Local opposition to Wal-Mart's expansion has blocked some of the subsidy deals the company has sought, the study recounts.

In 1998, the California Supreme Court affirmed a lower court decision striking down a $1.9 million subsidy in Chula Vista, California. The courts ruled the subsidy violated a 1993 anti-big box store amendment to a state development law that prohibits taxpayer subsidies for retail projects on five or more acres of land previously undeveloped for urban use.

In some cases, Wal-Mart has proceeded with development after losing subsidy packages.

In other cases, it has dropped plans. In Chicago in 2002, for example, the company sought $18 million in subsidies in connection with a project for the Near South Side of Chicago. Chicago Mayor Richard Daley rejected the request and Wal-Mart abandoned the project. And in March 2004, Scottsdale, Arizona voters rejected a plan to give up to $36 million in sales-tax rebates to a developer for a project that would have included a Wal-Mart Supercenter and a Sam's Club. The development project now appears defunct.

The Good Jobs First study was funded in part by the United Food and Commercial Workers union, but the union played no role in the research or analysis. n 10 Largest Wal-Mart Subsidy Deals
1. Sharon Springs, New York distribution cente $46.0 million
2. Opelousas, Louisiana distribution cente $33.0 million
3. Pageland, South Carolina distribution cente $28.2 million
4. Arcadia, Florida distribution cente $23.8 million
5. Robert, Louisiana distribution cente $21.0 million
6. New Braunfels, Texas distribution cente $20.0 million
7. Ottawa, Kansas distribution cente $19.0 million
7. Grove City, Ohio distribution cente $19.0 million
7. Baytown, Texas distribution cente $19.0 million
10. Bartlesville, Oklahoma distribution cente $15.9 million
Source: “Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth,” Good Jobs First, 2004.

So are you saying that wm is not a good thing?? That wm is getting billions of dollars in incentives that could better served say, helping the homeless, the poor?? That they could pay their employees a living wage, give them benefits and still make a hefty profit??

Are you trying to destroy the free enterprise system? Bring capitalism to it's knees?? Ruin America?? You commie pinko you!!

quote:

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Originally posted by AudioGuy:
So are you saying that wm is not a good thing?? That wm is getting billions of dollars in incentives that could better served say, helping the homeless, the poor?? That they could pay their employees a living wage, give them benefits and still make a hefty profit??

Are you trying to destroy the free enterprise system? Bring capitalism to it's knees?? Ruin America?? You commie pinko you!!

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Lol... ... Commie Pinko...I guess that is me...