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.
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.
“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.”
Citing the comprehensive case against big-box retailing made by Stacy Mitchell in her recent book Big-Box Swindle, LeRoy said: “Wal-Mart and its ilk are anathema to real community economic development.”
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. See the end of this release for a list of all 39 recent deals.
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.
The walmartsubsidywatch.org website can display state summaries as well as details of individual subsidy deals. It also has extensive rankings of both older and recent subsidy deals, including a list of the largest nationwide, the largest in each state and the largest in each category. It also has rankings of the states by the number of deals and value of deals.
NEW WAL-MART SUBSIDY DEALS FOUND OVER THE PAST 3 YEARS
(alphabetical by state, then city; for full details, see www.walmartsubsidywatch.org)
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