Weekly Update for Elected Officials: Nov. 21, 2008
Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.
This week’s issue begins with a new study from the group Good Jobs First, which reveals that cash-strapped states are forgoing a total of roughly $1 billion annually in tax revenue because of little-noticed laws that permit retailers to keep a slice of the sales taxes they collect for the government. In fact, the study finds thirteen states do not cap the amount that a retailer can receive as vendor compensation for collecting sales tax, resulting in millions of lost tax dollars.
A large focus this week is also on Wal-Mart’s announcement that Lee Scott will step down as CEO in February 2009, to be replaced by Michael Duke, Wal-Mart’s Vice Chairman of its International Division. In addition to the CEO change, you’ll find stories on the battle over the Employee Free Choice Act, how Wal-Mart will deal with the Obama Administration from a labor perspective, and related news on Wal-Mart’s labor battles in Canada.
And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. Wal-Mart has founded a new consumer group in New England geared towards fighting Wal-Mart opponents, and has purchased its own wind-energy supply based out of Odessa, Texas
Wal-Mart Watch Weekly Update for Elected Officials [November 21, 2008]
Posted by Corey Himrod on Friday, November 21 | 1 comments | Permalink
Mesa, AZ. States Give Millions In Sales Taxes Back To Wal-Mart And Other Retailers
The city of Mesa, Arizona has 20 Wal-Marts within a 10 mile radius. Half of those stores are supercenters. Although Wal-Mart is doing much better financially than the city of Mesa, the city is giving Wal-Mart corporate welfare. “With record home foreclosures, restrictions in the credit market, and increasing gasoline and food costs,” the city’s website notes, “all Arizonans are impacted by the economy right now.” Yet Wal-Mart is getting a taxpayer subsidy for building superstores. According to a new report from Good Jobs First, in 2007, Mesa, Arizona gave Wal-Mart a super-sized sales tax rebate of $11.7 million to help build infrastructure for a superstore. Between 1998 and 2008, the giant retailer was given $73 million in sales tax refunds or rebates by cities and towns. In Branson, Missouri, Wal-Mart grabbed more than $12.1 million in sales tax incremental financing—at taxpayer’s expense. Over the past decade Wal-Mart projects have received a total of $130 million (or an average of $13 million a year) from sales tax-based subsidies. These corporate welfare deals divert money from use in schools, public safety, and other pressing local needs. According to the new study, “Skimming the Sales Tax,”
Wal-Mart and other retailers have not only been given outright tax-supported grants to pay for items like roads, water and sewer lines---but these corporations have also been paid for collecting sales taxes by state and local governments. These so-called “vendor discounts” or “collection allowances” pay retailers for collecting sales tax on behalf of governments. There are currently 26 states which pay retailers to collect sales taxes, and Good Jobs First estimates that Wal-Mart alone receives a total of approximately $60 million in retailer compensation, and retailers generally scoop off $1 billion a year for being a sales tax collector. This payment is basically a service fee to compensate retailers for the time and trouble of recording sales tax collections and sending them to revenue agencies. Vendor compensation is typically calculated as a percentage of the sales tax collected by the retailer. The percentages range from 5% in New York to less than 1% in eight of the states. Some percentages drop as the collection amount rises. In some states there is a cap on how much sales tax is subject to a fee, and in other states there is no limit. “At a time when state and local governments are facing a fiscal crunch, policymakers should take a hard look at retailer compensation practices,” said Good Jobs First Executive Director Greg LeRoy.
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Posted by Al Norman on Wednesday, November 19 | 0 comments | Permalink
Should states let retailers keep such a hefty slice of the sales tax pie?
According to Good Jobs First and The Wall Street Journal, a large chunk of sales tax revenue gets redirected to retailers like Wal-Mart, a company that pockets an estimated $70 million a year in sales tax revenues.
At least that is the finding of a report released today by Good Jobs First, a nonprofit research group here in Washington:
Most of us don’t realize that in a majority of states with a sales tax, a portion of the money actually goes into the pocket of the retailer under programs set up by state and local governments. In this first-ever comprehensive national analysis of the subject, Good Jobs First finds that the public sector is losing more than $1 billion a year through these sales-tax diversions. A large share of revenue gets redirected to giant retailers such as Wal-Mart, a company we estimate pockets more than $70 million a year in sales tax revenues.
The state laws discussed in the report allow retailers to keep a portion of sales-tax revenue to offset the cost of collecting the funds in the first place, a reasonable enough excuse (especially since state governments are so flush with cash at the present). But does anyone really, and I mean REALLY, believe that Wal-Mart spends $60 million a year collecting sales tax? In this age of computer everything and electronic money transfers, I have a hard time believing it costs more than a fraction of that.
As it stands, many states have calculated a vendor compensation rate, which can be applied to a percentage of sales tax revenue to determine how much a retailer gets to keep for its trouble. As the WSJ reports, Good Jobs First has identified 13 states that impose no ceiling on the total amount retailers can keep. In states such as Illinois, Texas, Pennsylvania and Colorado that vendor compensation rate can be applied to the full amount of sales tax a company collects, resulting in substantial returns for companies like Wal-Mart. Good Jobs First has estimated the givebacks in these states - Illinois ($126 million), Texas ($90 million), Pennsylvania ($72 million), and Colorado ($69 million). Jesse Drucker at the WSJ kindly puts some perspective on those numbers - for example, the $90 million Texas gives away by not capping vendor compensation would cover the $82 million price-tag needed to fund that state’s primary pre-kindergarten program.
For what its worth, the Illinois Revenue Department was quoted as saying the state has tried to cap the compensation program, but relentless lobbying by the retail industry has so far kept legislators from making changes.
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Posted by Corey Himrod on Tuesday, November 18 | 6 comments | Permalink
Wal-Mart discriminates against female…sex offenders?
A Missouri City (Texas) woman convicted of a sex crime is out to prove that she has rights after being fired from her job at Wal-Mart.
Rebecca Vlasek, she of the inspiring mug shot, has filed suit claiming discrimination against our little Wal-Mart. Why you ask? Well, I’ll tell you.
Picture it: Brenham, Texas...1999. A sultry high school teacher pleads guilty to felony sexual assault of a minor. The charge: having a relationship with a 14-year-old female student. The result: 10 years on probation and the thrill of getting to register as an official pervert within the state of Texas. You can check out her rap sheet here and here.
So why is Vlasek complaining now? Well Wal-Mart, it turns out, discovered some time ago that it has quite a few sexual offenders working within its friendly confines. And, as it also turns out, every so often one of these offenders decides to, how shall we say, engage in some recidivism? Like this, and this...AND this........AANNNND this.
The result is that Wal-Mart, since adopting a new criminal background check policy, has fired approximately 800 employees who are registered sex offenders. Vlasek (pictured more recently), however, isn’t complaining about those that were fired...no, she’s complaining about the 25 or more (male, she claims) employee offenders Wal-Mart ISN’T firing. That’s right - according to her complaint, Vlasek is alleging that she has received disparate treatment because of her gender. We’ll see whether the court buys the arguments that Vlasek was fired not just because she “had relations” with a 14-year-old girl but because she is a woman...AND that Wal-Mart retained those other 25 or so offenders specifically because they’re men, and not for some other reason.
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Posted by Corey Himrod on Friday, November 14 | 0 comments | Permalink
Weekly Update for Elected Officials: Nov. 12, 2008
Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.
This week’s issue begins with a Bloomberg report of Wal-Mart being placed on a list of most controversial companies. Also named - the company responsible for producing melamine-tainted milk in China. The list includes companies criticized for producing negative impacts on communities, health, and the environment, and was based on a study by RepRisk, a consulting firm that analyzes companies’ exposure to controversial issues and news.
You’ll also find stories from BusinessWeek and the Financial Times on how corporate giants like Wal-Mart are gearing up to battle potential pro-labor legislation in 2009. With President-Elect Barack Obama and the Democrats taking over next year, retailers are bracing to fight the Employee Free Choice Act – or EFCA – which could make it easier to organize unions in the workplace.
In addition to EFCA, you’ll find stories on Wal-Mart and the economy. And from the legal front, read about a $19 million discrimination lawsuit filed against Wal-Mart and Pepsi in West Virginia. Plus, in the world of product safety, read more about questions raised by the controversial chemical BPA, as well how Wal-Mart has been selling lead-tainted face paint for kids…a no-no anytime, and especially around Halloween.
And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. Chicago city aldermen have a wish list for an Obama presidency; the fight continues over whether Wal-Mart can build near a Civil War battlefield in Virginia; and towns in California and Nevada deny Wal-Mart the ability to sell alcohol on its store shelves.
Wal-Mart Watch Weekly Update for Elected Officials [November 12, 2008]
Posted by Corey Himrod on Wednesday, November 12 | 31 comments | Permalink
TEXAS SITE FIGHT: WAL-MART GOING AT IT AGAIN IN CORPUS CHRISTI
Wal-Mart officials are looking to build a Supercenter in Flour Bluff to replace its store off Waldron Road.
Spokeswoman Sally Aiello confirmed the company’s intent to find a location to build a larger store, saying that the present store offers no room to expand. But she wouldn’t release further details.
“We have three projects in Corpus Christi that are not yet at the point where I can disclose more information,” she said.
Wal-Mart also has proposed a Supercenter at Parkdale Plaza on Staples Street but a lawsuit involving Parkdale Plaza and Sutherlands, a tenant of the plaza’s owners, delayed the store’s plans. The suit was dropped in August, but Wal-Mart officials have not disclosed their plans for the site.
Also see: Corpus Christi, TX. Will Shopping At Wal-Mart Bring People to Jesus? [Battlemart Blog]
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Posted by Luke West on Wednesday, November 12 | 0 comments | Permalink
Corpus Christi, TX. Will Shopping At Wal-Mart Bring People to Jesus?
Wal-Mart has 4 existing stores in Corpus Christi, Texas-—two of them supercenters. But the company has been scouting out a number of new sites---some of which have died, some of which have been resurrected. A new site announced this week has one local pastor wondering if more people will find Jesus if a Wal-Mart is built near his church. One thing he knows for sure: he’s going to see more traffic on narrow city roads. On February 19, 2008, Sprawl- Busters reported that Wal-Mart had been hit with a double whammy in Corpus Christi, Texas. One planned supercenter was dead, and a second was mired in a landlord-tenant lawsuit. The dead project was on the southside of the city, in the Timbergate neighborhood. According to the Caller-Times newspaper, Wal-Mart got a waiver approved by the city’s Planning Commission in November 2007, after resubmitting their plans for a rezoning. In March, 2007, Wal-Mart squeaked by the Planning Commission on a 5-3 vote in favor of the project. But in June, Wal-Mart withdrew their rezoning application for South Staples Street just one day before it was scheduled to come before the City Council. Normally, if an application is pulled, the proponent has to wait a full year before resubmitting. But in this case, Wal-Mart asked that their cooling off period be cut in half.
Wal-Mart wanted the city to change the land from its current designation of single family, to a neighborhood business district. To apply for the neighborhood business zone, Wal-Mart had to eliminate a tire and lube center from the mix. City staff admitted that granting a waiver was a “rare occurrence.” But when the Planning Commission met, they voted unanimously to approve a “rare” waiver for Wal-Mart, allowing the company to proceed with their rezoning application. Corpus Christi planning staff said at the time that the retailer had not given them enough information to make a decision. “We need time to review and recommend and we’re frankly not convinced (the latest information from Wal-Mart is) adequate, but it’s at least a step in the right direction,” the city’s planning director told the Caller Times. But by February, 2008, plans for the Southside Supercenter had fallen apart, because the landowners announced that they were selling the property to the H.E.B. grocery chain. In the meantime, the second Wal-Mart project at the Parkdale Plaza, a 203,000 s.f. supercenter, ran into a landlord-tenant dispute. Dueling lawsuits were filed by the Parkdale Plaza owners and their tenants, the Sutherlands, a home improvement chain store in 13 states in the south, Midwest and Gulf Coast. The Sutherlands were sued for allowing their parking lot to deteriorate and become pitted. The Parkdale Plaza owners were sued by Sutherlands for violating an agreement not to allow a direct competitor to the home improvement store into the Plaza. Sutherlands said their lease prevents the landlord from allowing another prospective tenant to be “permitted to sell building materials and/or home improvement supplies and services.” Sutherlands wanted Wal-Mart to show that its product mix would not affect Sutherlands’ business and current lease. The Parkdale Plaza owners said the Sutherlands lawsuit was freezing progress on the Wal-Mart Supercenter and that Sutherlands needed to maintain its parking lot, or the company could face a termination of their lease.
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Posted by Al Norman on Wednesday, November 12 | 0 comments | Permalink
UTAH SITE FIGHT: EXPANSION OK’D IN SUMMIT
Summit vote OKs a larger Wal-Mart [Salt Lake Tribune (Utah)]
Wal-Mart at Kimball Junction is going to get a lot bigger.
The Summit County Commission, in a split 2-1 vote, gave the discount retailer the green light to expand its 72,000-square-foot operation to 115,000 square feet.
The bigger store will include grocery.
The Snyderville Basin Planning Commission had previously approved the conditional-use permit for the expansion with the caveat that increased traffic from the enlarged store could be mitigated.
The realignment and expansion of Landmark Drive that is nearing completion at Kimball Junction will meet that condition, said Commissioner Bob Richer.
“The road project mitigates and improves traffic flow for all businesses in the area.” Among other things, Wal-Mart paid a $145,000 traffic-impact fee.
Commissioner Sally Elliot cast the lone dissenting vote because she said the planned 74-square-foot sign for the building would be too big.
Smaller businesses in the area are restricted to signs no larger than 30 square feet. But a formula based on exterior facades for larger buildings allows increased signage.
“I just felt 30 square feet was more appropriate,” Elliot said.
- Christopher Smart
Also see: Park City, UT. Wal-Mart Expansion Squeaks By On One Vote [Battle-Mart Blog]
Posted by Luke West on Thursday, November 06 | 0 comments | Permalink
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