CHICO A former state commerce official said Tuesday that communities that have seen WalMarts expand into supercenters have benefited by increases in tax revenue.
Lon Hatamiya, who served as the state's Technology Trade and Commerce Department top official from 1999 to 2003, came to that conclusion after studying California-gathered retail sales tax data. Hatamiya indicated the higher retail sales tax revenue was linked to additional shoppers coming to a community or increases in sales at other businesses.
Hatamiya, of Davis, is a director of Navigant Consulting, a certified public accounting firm that advises government and businesses. He studied sales tax revenue from businesses in direct competition with WalMart, such as apparel and drugstores, and those that weren't, such as gas stations, auto dealers and restaurants. For all 21 communities with supercenters, citywide taxable retail sales increased the year after the opening by an average of 15 percent, he said.
His study, done on communities with supercenters opened between 2003 and 2007, also indicated the opening of a supercenter did not wipe out smaller businesses. By studying the number of retail business permits issued, he found business operations increased during the first year everywhere except Palm Desert, Palm Springs and Gilroy. "What's important is this rebuts the common belief that others go out of business. It's the opposite. It attracts business."
The data did not allow him to determine which specific businesses survived and which didn't, only a total number of permits.
In Northern California, business permits increased with opening of Supercenters in Anderson, Marysville and Yuba City, he said. He said in Anderson, the first year after a supercenter opened retail sales tax revenue increased $51.2 million, which was a 37 percent jump. In Yuba City, the sales tax revenue increase was $35 million. Retail sales tax revenue also increased in subsequent years to openings, but not in every community, the study showed. Talking to members of the Chico Chamber of Commerce and Chico Economic Planning Corp., Hatamiya said WalMart paid him to do the study, but said the retail giant did not demand a certain conclusion.
CEPCO paid for Hatamiya's visit, and also released a study in 1999 about taxable sales and Wal-Marts that indicated communities benefited. Saying they were protecting their small businesses, some communities have adopted new policies preventing WalMart from opening supercenters, which generally have a grocery store and wider selection. A proposed expansion of the Chico store has been controversial. "It was an eye-opener to see the benefits brought to a community," Hatamiya said. "Any opportunity to generate increased sales tax benefits you in increased services," he told the group.
Besides new jobs and revenue, WalMart is one of the few retailers growing during tough times, he noted.
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