Is retail business a net benefit or a net burden to a town? A developer or retailer is likely to argue that retail stores are a benefit, citing job creation and property tax payment. However, the cost of town services (fire, police, etc.) also needs to be considered. Newington's police chief Michael Custer said Wal-Mart "is draining his department's resources with shoplifting calls and requests to help track down check bouncers." Newington's fire department has cited Wal-Mart with numerous fire code violations. [Source: Retailer Putting Stress On Police, Fire Departments, by Ann Marie Somma, Hartford Courant, Mar 3, 2005].
Manchester and Norwalk, two of the largest retail areas in Connecticut, are asking for help with the burden that retail stores put on the town. Proposed Connecticut bills 230, 697, 5355, 5489 and 5938 ask for a portion of sales tax revenue to be shared with the municipality in which the sales tax is generated in order to "offset the costs associated therewith." See the Connecticut General Assembly website, www.cga.ct.gov, for more information.
Chris Powell commented "Now towns would get a state bonus for sprawl" and "The sales tax diversion legislation is just a shell game whose only point is patronage." See the following editorials for a reaction to these bills:
Economic impact studies
A study done by Tischler & Associates in 2002 for the Town of Barnstable, Massachusetts compares revenue, cost, and net impact on the town for several types of businesses. The table below shows that specialty retail stores, business parks, offices and hotels have a net positive impact and that shopping centers, big box stores, restaurants and fast food restaurants have a net negative impact.
Revenue, Costs and Net are annual amounts per 1,000 square feet or hotel room.
FISCAL IMPACT ANALYSIS OF RESIDENTIAL AND NONRESIDENTIAL LAND USE PROTOTYPES [pdf], Prepared for: Town of Barnstable, Massachusetts, Prepared by: Tischler & Associates, Inc. Fiscal, Economic, and Planning Consultants, July 1, 2002.