The expansion of big-box retailers has been financed in part by massive development subsidies and tax advantages provided by local and state governments. These studies document those subsidies and their failure to produce real economic benefits for communities.

An Assessment of the Effectiveness and Fiscal Impacts of the Use of Local Development Incentives in the St. Louis Region, [PDF]
By East-West Gateway Council of Governments; January 2009

This study finds that, despite spending more than $2 billion in tax breaks for new shopping centers and big-box stores, the St. Louis metro region has seen no growth in either retail sales or jobs. Between 1993 and 2007, the study estimates that tax increment financing (TIF) and special tax districts alone cost taxpayers $2.5 billion. About 80 percent of this was directed to retail development, including many large shopping centers filled with chain stores and located in affluent suburbs. The study concludes that the subsidies did not increase taxable retail sales, nor did they boost revenue for local governments. Furthermore, the subsidies did not produce significant job gains. Although TIF-financed big-box stores and shopping centers created 32,550 new retail jobs, some 27,150 retail jobs were lost at existing businesses, resulting in a net gain of only 5,400 jobs. That works out to a public cost of $370,370 per job created - a staggering figure considering that the average retail job pays $18,000 per year. Using tax incentives to lure development pitted municipalities against each other, which ultimately resulted in more communities losing taxable sales than gaining them. The study identifies the loose definition of "blight" as a main cause for the excessive amount of TIF subsidies going to new suburban retail development, and documents how lax disclosure and reporting requirements make it impossible for citizens and local governments to monitor whether incentives are actually producing economic benefits.

Skimming the Sales Tax: How Wal-Mart and Other Big Retailers (Legally) Keep a Cut of the Taxes We Pay on Everyday Purchases [PDF]
By Philip Mattera with Leigh McIlvaine; Good Jobs First; November 2008

This study highlights little-noticed laws in 26 states that allow retailers to keep a portion of the sales taxes they collect from shoppers. The stated purpose of these policies is to compensate retailers for the costs they incur collecting the tax. However, while half of these states cap the amount retailers can keep, the other 13 states have no cap. Because the cost of collecting sales taxes declines with volume, states without caps are providing big retailers with outsized compensation that bears little relationship to their actual costs. This practice is costing states over $1 billion a year and lining the pockets of large chains, notably Wal-Mart. The report breaks down the losses for each state. Additionally, this study exposes how local governments subsidize the large chains by giving them sales tax rebates or funding part of their projects with sales tax increment financing. Using these two strategies, Wal-Mart has received $130 million in sales tax diversion over the past decade.

Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never- Ending Growth [PDF]
by Good Jobs First, August 2004

This study identifies 244 Wal-Mart stores and distribution centers in 35 states that have received state and local development subsidies totaling just over $1 billion. The subsidies took many forms, including property tax rebates, free or reduced-priced land, and funding of site preparation and on-site infrastructure. Tax increment financing (TIF) ranked as one of the most common mechanisms used by local governments to underwrite Wal-Mart's growth. The total value of public giveaways to Wal-Mart is undoubtedly much higher than the $1 billion documented by the report. Obtaining complete data on subsidies is virtually impossible. In most states, local governments and state agencies are not required to report subsidies, and there is no centralized record or database. Good Jobs First relied primarily on the online archives of local newspapers to assemble the list of subsidy deals, the details of which were confirmed by interviews with local officials.

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