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Galt City Manager Jason Behrmann expects large increase in tax revenue from new Walmart

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Posted: Saturday, February 15, 2014 12:00 am

City Manager Jason Behrmann doesn’t need a study to know what he already believes is true — when Walmart opens in Galt later this year, it is expected to boost the city’s tax revenue by half a million dollars.

According to a new statewide study released this week, the development of a local Walmart can be a bargain for communities looking for an economic boost.

Lon Hatamiya of the Hatamiya Group conducted a fiscal analysis of communities with Walmart Supercenters and compared the results to specific, similarly sized communities without the retail giant. The findings indicate that Walmarts support regional job creation and encourage growth of small businesses, in addition to increasing sales tax revenues in the communities where they are located.

A study conducted in 2008 showed similar results.

In Galt, where the big-box store’s shell is up and was expected to have electricity by the end of last week, an economic impact study was completed before the store was approved by elected officials.

Based on that report, the city’s leaders anticipate the 133,000-square-foot store on Twin Cities Road will generate more than $500,000 in additional tax revenue per year, primarily from property and sales tax revenue. This includes Measure R taxes, approved by voters to fund public safety in Galt.

The Walmart will not only create new shopping opportunities for residents who currently have to travel to Elk Grove or Lodi to purchase basic items like socks, but it will also provide jobs, city officials have said. About a fifth of the sales floor is expected to be dedicated to groceries.

While the study only looked at Supercenters, which are typically 200,000 square feet or larger, many of its projected economic benefits are expected to be seen in cities where Walmarts are constructed as well, Walmart officials say.

Construction on Galt’s store began in Sept. 2013. Grading for the parking lot has started, and once required environmental soil tests are in and acceptable, workers will lay asphalt for the parking lot and other areas, according to Behrmann.

Exterior painting has begun on the rear of the building, as well as the sales floor interior. Construction of all the structural elements of the roof is also done, including installation of skylights, he said.

For more than a decade, Walmart has been working to build a Supercenter in Lodi, where there is already a smaller Walmart. Current sales tax revenue from the store is not public record, and property tax revenue was unavailable late Friday.

Lodi requested that the big-box store find a replacement tenant for the current store before opening a new location across the street, for fear the former site would be left abandoned and become an eyesore. The city also asked Walmart to purchase land elsewhere to mitigate what the city says will be lost farmland at the southwest corner of Lower Sacramento Road and Kettleman Lane, where Walmart hopes to build the Supercenter. Last June, the company bought farmland outside city limits as part of the project agreement.

The original proposal was for a 220,000-square-foot store.

The Hayamiya study commissioned for Walmart sampled a random selection of California communities with varying populations where Supercenters have been opened since 2003. Researchers quantified the taxable retail sales and retail business permits and compared the results to communities without Supercenters, resulting in an economic impact analysis of year-to-year changes.

Researchers also compared data from the years immediately preceding and following the opening of a Walmart Supercenter, in order to determine whether economic growth could be attributed to the establishment of a Walmart.

The study found total taxable retail sales in communities with Supercenters increased by an average of 20.3 percent after the opening of those stores, while communities without Supercenters saw an average decrease of 11.7 percent over the same time period.

Total retail business permits in communities with Supercenters increased by an average of almost 50 percent after the opening of those stores, while communities without Supercenters only saw an increase of 20.3 percent.

It did not look at cities such as Lodi that already have a regular Walmart.

And, the study did not take into account other economic factors.

As of last fall, Walmart has 105 Supercenters, 96 Discount Stores, 42 Neighborhood Markets, 33 Sam’s Clubs and seven distribution centers in California.

Contact reporter Jennifer Bonnett at jenniferb@lodinews.com.

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2 comments:

  • Victor Ferrise posted at 1:56 pm on Sun, Feb 23, 2014.

    Symbiont Posts: 6

    More tax revenue means higher incomes....but for who I wonder?

     
  • Frederick Goethel posted at 1:58 pm on Sat, Feb 15, 2014.

    Frederick Goethel Posts: 50

    I find it interesting that a study commissioned by Wal-Mart and paid for by them finds that they help the community economically. Who would have guessed that would be the case? More interesting is that independent studies have shown just the opposite effect of those stores moving into a town. But the big question comes with an new tax money....at what cost to that community? Does the City Manager think this will not hurt businesses located in other parts of the city? If I want to buy dog food now where will I go....Wal-Mart or Tractor Supply? I think h answer is self evident. And I will be interested to see the real amount of NEW ales taxes after the first full year of operation.....I really doubt it will be all that much....more a shift of taxes from existing businesses!

     

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