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2007-06-07
Washington, D.C. Wal-Martís Corporate Welfare, Part II

For nearly a decade, Sprawl-Busters has written about the use of tax dollars to subsidize Wal-Mart stores and distribution centers. The group Good Jobs First, based in Washington, D.C., has issued the second part of a comprehensive study of taxpayer subsidies the retailer has received over the past three years, totaling more than $200 million in corporate welfare. Here is the press release sent to Sprawl-Busters this week by Good Jobs First: "Wal-Mart Stores Inc., which is often accused of growing at the expense of smaller retailers, continues to benefit enormously from state and local government economic development subsidies, including 39 deals worth more than $200 million in just the past three years. This according to Good Jobs First, a non-profit research group which today issued an update of its landmark 2004 report Shopping for Subsidies, which found more than $1 billion in subsidies for Wal-Mart facilities. "What we said in 2004 still holds true today: Wal-Mart presents itself as an entrepreneurial success story, yet it routinely gets big tax breaks, free land, cash grants and other forms of taxpayer assistance," said Philip Mattera, research director of Good Jobs First. "That a company with a predatory business model and a poverty-wage labor policy can even qualify for job subsidies suggests many public officials still don't get it," said Greg LeRoy, executive director of Good Jobs First. "When they sit down at the table with Wal-Mart, the prize at stake is not a new Wal-Mart; the prize is access to more market share." The new subsidy deals benefit 30 stores and 9 distribution centers in 15 states. The stores (all but one of which are Supercenters combining groceries and general merchandise) accounted for about $190 million of the $220 million total, an average of about $6 million per store. The distribution centers accounted for about $30 million, an average of about $3 million per facility. The distribution center amount is understated, because several warehouses will enjoy enterprise zone benefits, the value of which cannot be estimated before the centers open and begin hiring. The state with the most new deals was Illinois with 9. It was followed by Florida and Missouri with 4 each; Arizona, California and Kansas with 3 each; and Colorado, Indiana, Louisiana and Ohio with 2 each. Alabama, Maryland, Minnesota, Texas and Wyoming each had one recent deal. Illinois also accounts for the most deals in the entire Wal-Mart Subsidy Watch database with 38. Following it are Texas (29), Missouri (23), Louisiana (20) and California (18). The most common type of subsidy found by Good Jobs First among the new deals was infrastructure assistance, which occurred in 21 facilities and accounted for $124 million of the total subsidies (with the money usually raised through tax increment financing, or TIF). The second most significant type, by value, was sales tax rebates, which went to 10 stores and totaled $55 million. These rebates occur when a locality allows Wal-Mart to keep a significant portion of the sales taxes it collects from customers that would normally go to local government. "We saw few such rebates in our previous work," Mattera noted. "This new trend suggests that Wal-Mart seeks increasingly to be subsidized directly by its customers, even though it often brags about how much money it saves them." "As with our findings in 2004," Mattera said, "the updated totals have to be regarded as incomplete, given that the quality of disclosure of development subsidies is poor in most states. In most cases, we learned of deals first through articles in local newspapers. We then interviewed local officials and obtained documents to confirm the facts and get additional details." Although it was not practical to contact local officials in each of the hundreds of communities in which Wal-Mart opened new stores each year, Good Jobs First did contact officials in all the communities in which new distribution centers have been announced over the past three years. Subsidies were found for 9 of the 10 (the exception being Storey County, Nev.). While all of the distribution center subsidies directly benefited Wal-Mart or its affiliates and subsidiaries, some of the deals for retail projects went through the developers of shopping centers in which Wal-Mart stores serve as anchors. Good Jobs First regards these as, in effect, subsidies to Wal-Mart, since they help make possible the company's expansion. Moreover, by reducing land acquisition and site preparation costs for developers, the subsidies presumably lead to lower rents for Wal-Mart. If there was more than one anchor store in a given shopping center, the value of the subsidy was divided among them equally.

What you can do: If you search sprawl-busters.com on the Newsflash page by the words "corporate welfare," you will find similar stories that go back to 1998 -- years before the Good Jobs First report. The new report list the following subsidy deals over the past three years: Birmingham, AL Supercenter. Subsidy value: $11 million;
Kingman, AZ distribution center. Subsidy value: not available; Mesa, AZ Supercenter. Subsidy value: up to $13.2 million; Oro Valley, AZ Supercenter. Subsidy value: $11.6 million; Barstow, CA distribution center. Subsidy value: not available; Lancaster, CA Supercenter. Subsidy value: more than $2.3 million; Merced, CA distribution center. Subsidy value: not available; Lafayette, CO Supercenter. Subsidy value: $2.1 million; Westminster, CO Supercenter. Subsidy value: $5 million; Alachua, FL distribution center. Subsidy value: $2.6 million; Crescent City, FL distribution center. Subsidy value: not available; Sarasota (Newtown), FL Supercenter. Subsidy value: at least $2.6 million; Warrington (Pensacola), FL Supercenter. Subsidy value: not available; Belleville, IL Supercenter. Subsidy value: $9.9 million; Collinsville, IL Supercenter. Subsidy value: $9.5 million; Glenwood, IL discount store. Subsidy value: more than $2 million; Lincoln, IL Supercenter. Subsidy value: up to $585,000; New Lenox, IL Supercenter. Subsidy value: up to $3.4 million; Orland Hills, IL Supercenter. Subsidy value: $12 million; Romeoville, IL Supercenter. Subsidy value: up to $3.5 million; Wood River, IL Supercenter. Subsidy value: $8 million; Zion, IL Supercenter. Subsidy value: about $1 million; Fort Wayne, IN Supercenter. Subsidy value: $3.16 million; Gas City, IN distribution center. Subsidy value: more than $6.4 million; Gardner, KS Supercenter. Subsidy value: $5.7 million; Olathe, KS Supercenter. Subsidy value: not available; W. Kansas City/Speedway, KS Supercenter. Subsidy value: $29.1 million; Port Allen, LA Supercenter. Subsidy value: $1 million; Vidalia, LA Supercenter. Subsidy value: up to $1.65 million; Princess Anne, MD distribution center. Subsidy value: up to $12.5 million; Mankato, MN distribution center. Subsidy value: $2 million; Branson, MO Supercenter. Subsidy value: estimated $12.1 million; DeSoto, MO Supercenter. Subsidy value: approximately $1 million; Kansas City/Blue Ridge Mall, MO Supercenter. Subsidy value: $27.7 million; Raytown, MO Supercenter. Subsidy value: at least $4 million; Cleveland/Steelyard Commons, OH Supercenter. Subsidy value: $4.2 million; Lancaster, OH Supercenter. Subsidy value: $1.26 million; Frisco, TX Supercenter. Subsidy value: estimated $2.5 million; Cheyenne, WY distribution center. Subsidy value: estimated $6.3 million. Details of the 39 new deals, combined with more than 240 deals from the 2004 report, are available on a new searchable website called Wal-Mart Subsidy Watch (www.walmartsubsidywatch.org).
The original 2004 Shopping for Subsidies report and other Good Jobs First material can be found at www.goodjobsfirst.org. The new website also contains a summary of disclosures made by about two dozen states on the number of Wal-Mart workers (or their dependents) who have enrolled in taxpayer-funded healthcare programs such as Medicaid and the State Children's Health Insurance Program. Search Newsflash by "corporate welfare" for Sprawl-Busters's list of similar stories over the years.










 
 
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