Good Jobs First Exposes Wal-Mart (Again)

Cover illustration from a October 10, 2007 report from Good Jobs First (GJF) "Rolling Back Property Tax Payments." The non-profit stresses economic development, accountability and smart growth. (to be added, as Tech has removed all the Windows machines from Torgeson and Blogger doesn't seem to want to upload a jpg from the remaining Macs. Go figure.

Before I get into the report, though, I thought I'd reverse Grandma's rule (eat your veggies before I give you dessert) and offer a few laughs from sites I found yesterday when I was researching the Robertson story:


Now, back to Wal-Mart. While the company brags about its a good corporate citizenship, its largess in donated profits, besides being a tax write-off, actually may represent funds transferred from the tax coffers.

Most folks will have heard by now of subsidies that Wal-Mart requests before building a new store or distribution center. A 2004 report by (GJF) revealed these include:

  • Free or reduced-price land;
  • Infrastructure assistance such as construction of access roads, water and sewer lines;
  • Tax increment financing to the company even newly-developing or even prosperous areas;
  • Property tax abatements, often for ten years. In some cases, Wal-Mart lets ownership remain with public authorities, thus making it tax-exempt;
  • State corporate income tax credits, which is hard to research since the tax returns are not public documents;
  • Sales tax rebates in which the retailer retains retain a potion of the sales tax it collects;
  • Enterprise zone which in the addition to the above may include reduced utility rates, low-interest financing and/or job training grants;
  • Job training and worker recruitment grants;
  • Tax-exempt industrial revenue bond financing; and
  • General grants. Virginia provided grants to several Wal-Mart distribution centers from the Governor's Opportunity Fund.
Some folks may have even heard the company's reported use of the real estate investment trust exposed by the Wall Street Journal February 1, 2007 in Jesse Drucker's "FRIENDLY LANDLORD: Wal-Mart Cuts Taxes By Paying Rent to Itself. "

But what you may not have read (I know I hadn't) is that Wal-Mart often challenges its property tax assessments, forcing localities to ante up tens of thousands of dollars on outside lawyers, appraisers and other consultants to defend the challenges. Philip Mattera, the non-profit's research director and principal author of the October 10 report says,

Wal-Mart, a company with $350 billion in annual revenues and $11 billion in profits, drains vitally needed funds from communities by regularly challenging the valuation put on its properties by public officials. When the company succeeds in one of these challenges, it diminishes the funds available to pay for education, police and fire protection, and other essential services provided by local governments.
Mattera looked a large national sample of Wal-Mart stores and all of its distribution centers open as of the beginning of 2005 and concluded that the retailer has filed assessment challenges at more than one-third of its facilities, sometimes in multiple years. GJF executive director Greg LeRoy notes the irony,

When it meets opposition to a new store, the company claims it will bring economic benefits to the community, which would normally be reflected in higher property values.Yet, in these assessment appeals the company routinely argues that the value of its properties has declined. Unwittingly, Wal-Mart appears to be confirming the argument often raised by neighborhood groups that the construction of one of the company's giant stores will reduce property values.

Below are some of the statistical highlights from the report for stores and distribution centers combined:

Locations w/ at least one appeal.......................... 1,031
Locations w/ appeal as portion all locations......... 36.3%
Locations w/ at least one successful appeal................. 570
Total appeals............................................. 2,125
Total successful appeals.................................... 921
Success rate (excluding pending appeals)................... 49.8%
Total cumulative tax savings...................... $28.8 million
Approximate annual tax savings....................... $3 million

If you want an opportunity to get together with Materra and the other folks at GJF, as well as with other campaigners, researchers and experts, consider attending the organization's third national conference, to take place May 7 and 8 near BWI Thurgood Marshall Airport.

Confirmed speakers are:
  • The New York Times investigative reporter David Cay Johnston (archive), author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill); and
  • New Rules Project Coordinator Stacy Mitchell, author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Business .
Conference tracks are:
  • Community Benefits Agreements - presented by the Partnership for Working Families the national network promoting CBAs
  • Economic Development Subsidy Accountability: core policy reforms disclosure, clawbacks, and job quality standards plus corporate tax scams such as Single Sales Factor plus emerging issues such as Climate Quality Standards (to curb global warming)
  • Smart Growth for Working Families: GJF's work on sprawl and good jobs, including mapping deals against race, income, poverty, transit access, plant closings
  • Advanced Research Sources and Techniques (on both subsidies and corporations), led by Mattera, emphasizing new online resources; and
  • Wal-Mart/Big-Box Regulation: Wal-Mart accountability, the New Rules Project, and the fascinating campaign against Cabela's by a competitor.


Here's some other interesting reading: