Monday, March 03, 2008

Another Wal-Mart hidden subsidy??

Originally uploaded by Lone Primate
How much does Wal-Mart really cost?

Previously in this blog I have discussed Wal-Mart and its hidden cost. Much like highways, many people don't realize exactly how much Wal-Mart truly cost because many of the subsidies it receives are even the Billion dollars or more of direct subsidies are brushed under the carpet.

Here is another example of a hidden subsidy for Wal-Mart.

UDOT is about to proceed with a huge interchange project and railway overpass in the Springville area. For people familiar with the area will know that the entire area changed with the opening of a Wal-Mart Supercenter.

The problem with a place the size of Wal-Mart is that it concentrates so much traffic into such a small area. In addition anyone who shops at this center comes by car since there is not transit service here except for the nearby Park N Ride lot.

Now there is a project to rebuild the interchange where the Super Wal-Mart is located and a railroad overpass nearby.

While this is one of the major entrances to the city of Springville, the entire character of the area was changed with the Wal-Mart opened. Of the 82 million dollar cost of the project, how much can we contribute the the supercenter? Lets assume that 25% of the project is caused by the Wal-Mart and the rest by growth in the city (I think you would be hard pressed to figure out all of this infrastructure would be needed without Wal-Mart).

That would mean that $20 million of this project is directly contributed to the Wal-Mart being located at that off ramp. Most Wal-Mart's in the area bring an estimated $500,000 a year in sales taxes. That means it would take about 40 years of sales tax revenue for Wal-Mart to pay off its portion of the sales tax.

Now lets say the the businesses that located in the area because of Wal-Mart generate another 250,000 in sales tax revenue, you are still talking 30 years before just this project is payed off by the revenue.

That does not include the other cost that go up with a Wal-Mart such as police and fire.

So how much did your Supercenter truly cost????


American Fork said...

Another cost of Walmart that is NOT hidden is the ugly abandoned Walmart on the American Fork 5th East Exit that was left behind when the SuperCenter moved in at the Meadows.

We joke that they should turn it into low income housing for the Walmart employees, it could be like the company store or some such thing.

JMD said...

Exactly, plus the businesses that are stuck in the area are loosing sales because of it. Thank you for all your comments.

Gabriel J. Lopez-Bernal said...

Add to that the cost of Wal-Mart not paying employees living wages and the costs of additional area congestion...

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