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1998-09-03
Johnstown, NY. Welfare for Wal-Mart

What has $46 billion in assets, 3,408 stores around the world, and still receives state and federal tax subsidies? A: Wal-Mart Stores, Inc. There were more politicians on hand today than produce at the announcement in Johnstown, NY that Wal-Mart will open its regional grocery distribution center in this small community, thanks to some lavish assistance from New York taxpayers. NY's top banana, Governor George Pataki was on hand to boast that this "development" was just "another sign that New York's economy has turned the corner." What turned the corner was the use of local and state tax subsidies for a company that hada $122 billion in sales last year, and could easily have paved its own way in Johnstown. Here's the "corporate welfare" package New York officials laid at Wal-Mart's feet: 1) a $650,000 capital grant 2) a $250,000 employee training grant 3) up to $1 million in roadway improvements courtesy of the NY DOT, and 4) sales tax abatements and funding for water and facility improvments provided gratis by the Fulton County Industrial Development Agency. That's a lot of carrots. The Chairman of the Empire State Development Corporation said this plumb of a project "is just another example of how Governor Pataki's economic policies are creating jobs and opportunities for New Yorkers." But the 400 "permanent full-time jobs" that the warehouse will bring has to be offset by the job losses that will take place when other regional grocery stores lose market share to Wal-Mart, and close facilities and lay off workers. There will be no politicians around when those stores "turn the corner" into Chapter 11, or shut down their warehouse facilities. The fact is, Wal-Mart's move into groceries is being accompanied by a significant negative economic impact of other area businesses, and a more honest appraisal of this project would be that it is not economic development -- but economic displacement. The use of tax dollars to subsidize the opening of a warehouse that will put other warehouses and suppliers out of business is surely not the way New York state will turn the corner to prosperity. The tax payers of New York State are merely helping the world's richest retailer gain a pre-eminent share of the market.

What you can do: If you think its an unsound investment of tax dollars to provide corporate welfare to a company with 720,000 employees and the economic wherewithall to build its own distribution centers without taxpayers literally helping to pave the way, then call the Empire State Development Corporation at (212) 803-3740. Ask for Charles Gargano. Tell Mr.Gargano you'd rather see tax dollars spent on developing small business sector growth, than throwing tax subsidies at the likes of Wal-Mart.










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

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