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2003-09-27
Birmingham, AL. Lawsuit Filed to Stop City From Giving $10 Million in Corporate Welfare to Wal-Mart.

Wal-Mart is the richest company on welfare. It uses tax dollars to gain unfair advantage over its competitors, and to build new stores that shut down older ones. As of last winter, the state of Alabama had 34 Wal-Mart discount stores that were open, and 15 that were closed. The state had a total of 1.2 million square feet of "dark stores" on the market -- most of these properties were closed to make way for larger superstores nearby. And more closures are coming. Wal-Mart announced last year that it wanted to replace an "aging" company discount store in Huffinton. According to the Birmingham News, city officials in Birmingham promptly offered to give Wal-Mart $10 million in corporate welfare by refunding sales taxes to the company as an enticement to build a supercenter locally. Under the deal, the city would give Wal-Mart a 90% refund of the sales tax for roughly the first five years of the store's sales. With sales expected to be around $2.2 million a year, it would take just under 5 years to reach $10 million, at which point, the city would begin to receive the sales tax. Birmingham officials defended the give-back deal by pointing out that Wal-Mart would "create" 250 jobs. No analysis was done of how many jobs it would destroy. But a local merchant and a city resident filed a lawsuit in September of 2003 to prevent the city for honoring this blatant corporate free lunch. Southeastern Meats of Pelham, Inc, and William Craig charged in Jefferson County Court that Birmingham officials were giving Wal-Mart an unfair advantage over its smaller competitors, of misusing tax dollars, and of unfairly using eminent domain powers to coerce landowers to sell their land to the Wal-Mart development. Southeastern Meats has operated a store near the proposed Wal-Mart site for more than two decades. The company complains that the city never offered them any tax incentives to stay. "Southeastern Meats is standing up for all other small businesses that will be hurt by this new Wal-Mart," the merchant's attorney said. The lawsuit says that the tax break is just a fancy giveway that will redistribute the tax money already being collected, with money formerly spent at smaller merchants in Birmingham now going to Wal-Mart. "The city's $10 million gift to Wal-Mart cannot be justified on the grounds that it will generate new jobs or additional tax revenue," the suit says. "The city's gift was irrelevant to Wal-Mart's business decision to replace it's Wal-Mart stores with supercenters. The Huffman Wal-Mart would have been replaced with a supercenter regardless of the city's $10 million gift." The law firm handling the lawsuit told the News that "with possible schoolteacher layoffs due to the funding crisis and police suing over not being paid overtime, the city cannot afford to be giving away money to the world's richest corporation. That's corporate welfare." The lawsuit also takes issue with the city's threat to take properties by eminent domain, which gave Wal-Mart "an unfair and unlawful advantage over its competitors." "By using the threat of eminent domain, Wal-Mart was able to coerce the landowners and tenants of the coveted parcel to sell the land to Wal-Mart for less than it could have been obtained on the open market." The lawsuit claims that eminent domain is supposed to be used for public developments -- like roads and schools -- not for private gain.

What you can do: For other stories of Wal-Mart with its hand out, search this database by the words "corporate welfare".










 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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