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2005-05-22
Mt. Pleasant, MI. Wal-Mart's "Project 700" Needs Public Welfare

Wal-Mart's distribution system has been lavishly funded -- not by the corporation -- but by state and federal taxpayers. The Arkansas retailer has used public subsidies to help build many of its distribution centers. Over the years, Sprawl-Busters has written about this unfair form of corporate welfare, which allows the company to receive free infrastructure, or land, or both -- at taxpayer's expense. These subsidies amount to yet another unfair competitive advantage the retailer uses to put its competition under. The retailer rakes in $10 billion in profits last year, yet tells unsuspecting local officials that it cannot afford to build its own distribution centers with company funds, and needs taxpayer welfare to make its distribution centers work. While some states are re-examining the use of subsidies like tax incremental financing (TIFs) for such commercial projects, the state of Michigan seems to be oblivious to the enormous public subsidy from which Wal-Mart benefits. According to the Morning Sun newspaper, the Michigan House is considering legislation to allow distribution centers -- most notably built by Wal-Mart -- to qualify for state taxpayer welfare in the form of free transportation funds. Wal-Mart is currently trying to build a project code-named "Project 700" in the town of Mt.Pleasant, Michigan, but it wants public help to make it happen. "I look on this as a tool to be available to any community that would like to attract an employer with a large number of jobs," said Rep. Bill Caul, R-Mt. Pleasant. Caul has sponsored the House bill similar to one already passed by the Michigan Senate, that would allow state transportation money to be targeted for improving roads around such a center. The Michigan Senate approved a bill to permit the state's Economic Development Fund to help build roads to distribution centers larger than 500,000 s.f. The bill passed the Senate on a vote of 23-14, with 21 of those in favor of Wal-Mart coming from the Republicans side of the aisle. No retailer has received tax breaks in the past, and many lawmakers in Michigan wonder why Wal-Mart, the wealthiest of them all, needs financial help. Local officials have refused to confirm that Wal-Mart is part of Project 700. The Senate defeated an amendment that would have required workers at such distribution centers to earn, on average, at least the average weekly pay of all workers in the state.

What you can do: This Michigan bill is nothing more than Wal-Mart welfare. It would only benefit companies building very large distribution centers, so all the small and mid size retailers would be disadvantaged by definition under this bill. Some communities have turned down Wal-Mart distribution centers, like Killingly, Connecticut, and told the retailer they would have to build their projects on their own dime. The position at Sprawl-Busters is that commercial projects should not be eligible for TIF financing, or public subsidies of any kind, including discount stores or their distribution centers. The money to pay for those subsidies is coming from taxpayers, including other commercial taxpayers who never received any corporate welfare to build their stores. There is no justification to giving welfare to the largest retailers just because of their large size. That size is used to kill smaller commercial firms, and Wal-Mart distribution centers are the brain center of the network that kills smaller companies. There is no reason to subsidize a company that is narrowing the diversity and competitiveness of the retail lanscape. For a catalogue of cases in which Wal-Mart turned to taxpayers to build their distribution centers, search Newsflash by "corporate welfare" or "distribution centers."










 
 
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