Politics from the Palouse to Puget Sound

Saturday, February 23, 2008

My Response to Roger Whitten

Roger Whitten of Oakesdale has had a letter to the editor critical of the Hakwins project printed in both the Whitman County Gazette and the Moscow-Pullman Daily News. Here is my response that will run in the Gazette next week:
In a letter published in the Gazette last week, Roger Whitten argued that what we need is locally owned stores versus corporate owned big box stores.

The truth is that there is plenty of room for both here in Whitman County.

Because of the entrepreneurial American spirit, small business is the backbone of our economy. In fact, Lowe’s Home Improvement Warehouse first started out as a mom-and-pop hardware store back in 1921 in North Wilkesboro, North Carolina. Through hard work and ambition, there is now at least one Lowe’s in every state in the union.

But since the advent of national retailers such as A&P and Woolworth’s, the American consumer has turned to shopping at chain stores. And why not? Chains are familiar, a big plus in our highly mobile modern society, offer more bang for the buck to working families, and particularly in rural areas, provide a much larger range of shopping choices than would normally be available. They also help the communities in which they locate by bringing in jobs and increased tax revenue and help local retailers by bringing in customers from a wide geographic area.

If shoppers can’t get what they want here, they’ll go elsewhere. And that’s exactly what has happened. An economist at the University of Idaho found that in 2004, Whitman County, including Pullman, had a net loss of $158.4 million in taxable retail sales to neighboring communities with more chain stores such as Moscow, Clarkston, Lewiston, and Spokane. As far as any “decrease in sales tax revenue from the existing locally owned stores,” our severe lack of retail is the real culprit.

Whitten stated that, “Money spent in a corporate owned big box store leaves the county.” But that’s not true at all. Money is fungible. That means that regardless of whether it originates in a locally owned store or a corporate owned store, all money is the same. A dollar spent in a local store that goes towards sales taxes, property taxes, employee salaries and benefits, charitable donations, etc., is no more valuable than a dollar spent in a chain store.

Will the Hawkins development “suck money out of the county” as Whitten claims? Will there be “no net gain in sales tax revenue?” The answer is a resounding “NO!” According to the Department of Revenue, Whitman County, excluding Pullman, generated $30,774,961 in taxable retail sales in 2006. Estimates for the Hawkins mall, at a mere 40% build out, come in at $123,823,621 in annual taxable retail sales. That’s right. One shopping development will generate FOUR times the existing retail sales of all of rural Whitman County! That means four times as much sales tax revenue for the county (approximately $1.3 million a year). And more development near Hawkins can be expected to follow. Even though Mr. Whitten is not going to “go into debt to help large corporations,” $10 million for such a return is a slam-dunk calculation in any economic equation.

Some have questioned why the County Commissioners are placing so much emphasis (and county funds) into the area around Pullman. The answer is simple. If you only have a limited amount to invest in a stock, you’re going to pick the company that is growing the most and can give you the biggest return. Forecasts for area growth have the City of Pullman increasing its population by 24.49% between 2006 and 2025. Whitman County is only expected to grow by 9.37% during the same period. However, the sales taxes generated by development in the Pullman/Moscow corridor will be used not just in Pullman, but all over the county; from Hooper to Palouse, and from Rosalia to Uniontown.

For these reasons, we should all support the bold actions taken by our County Commissioners to stimulate economic growth. For their role in delivering the Hawkins project alone, Commissioner Jerry Finch and Commissioner Greg Partch deserve another term and have my vote.
Here is Whitten's letter:
In regard to the Hawkins shopping mall development, I wonder if the Whitman County commissioners are factoring in the decrease in sales tax revenue from the existing locally owned stores. For if a person buys a stick of lumber at a Lowe's Home Improvement store instead of buying lumber from an existing locally owned store, there is no net gain in sales tax revenue.

In fact, it would be an economic loss to the county because money that stays local recirculates locally. Money spent in a corporate-owned big-box store leaves the county.

It is the small Mom and Pop type of businesses that bring money into the county and keeps it here. The large corporate stores suck money out of the county.

If they follow the zoning codes, Hawkins has every right to build a shopping mall on its property. I, however, am not willing to go into debt to help large corporations take money out of the local economy. The county commissioner's decision to give Hawkins $10 million for the development of their own land is a miscalculation in the overall economic equation.


April E. Coggins said...

That's excellent Tom. Hopefully, you submited your reply to the Whitman County Gazette as well.

Tom Forbes said...

I did send it to the Gazette, not the Daily News.