Tax Incentives for a Retail Shopping Center?

* NOTE: I edited this so as to be correct in that The Daily News in fact has published this response. Thank You to the Daily News

Another news service in Batavia published an editorial supporting tax incentives for a retail plaza.

http://thedailynewsonline.com/opinion/article_89f5b4b4-a5f6-11e2-a613-0019bb2963f4.html

I sent them this letter. I want to thank them and I want to share it here as well.

Thank You Howard & Billie Owens for this open, public forum.

Regarding your April 16, 2013 Editorial: The Arguments for Tax Incentives, I as a founding member of the Genesee County Libertarian Committee, respond.

Sorry, editor, but the basis of your argument for tax incentives is flawed right from the onset. The only reason the former Lowe's location is empty now is because it probably never should have been built in the first place. Certainly the developer should never have received incentives to help them do it. Not to mention the ludicrously laughable notion of calling a shopping plaza a tourist destination. The Batavia Towne Center is a classic example of over-development. Communities all across New York State desperate to improve their economies continue to waggle tax incentives at large retail chain stores in the mistaken belief that there will be future sales tax income and jobs. The reality, unfortunately, is usually a bit different. The jobs are typically entry-level, non skilled and part time with low pay and high turnover. The actual sales don't result in a net bottom line increase for a community - they're sales that would have been captured by another retailer, but now at a lower price thereby actually generating less sales tax revenue for the community while the business profits leave town. Lowe's leaving shows that Batavia is already over-developed, and you admit in your editorial that it never lived up to it's expectations. Neither will Dick's in my opinion. It's fine if Dick's and whoever else will be sharing the space want to take the risk, then I'll wish them good luck. It's the American way: if you take the risk, you should reap the rewards. I do not, however feel the taxpayers should be sharing in this risk. That to me is precisely what COR Development is asking us to do, they took the risk (albeit with our help) and it didn't work out, predictably. Now they want the taxpayers to mitigate their loss. Sorry, you can't have it both ways guys.

Your argument that the local companies, such as Adam Miller and Genesee Lumber have survived in the face of big box retailers may have some merit. Yes, Dick's will never match the service of a homegrown Batavia sporting goods store, and maybe they will all survive, but at what cost? Just because they did not immediately close doesn't mean they have been doing well all this time. How do we know that if demand had increased, one of those companies could not have expanded, or a new local start-up would have come along? The answer is we don't know and we never will as long as incentives are continued to be offered to large chain retailers. It's true that the land where The Batavia Towne Center sits was under utilized and producing much less revenue before the plaza was built, but it's also true that we will never know what might have been there instead. What we can predict is Lowe's will not be the last empty store in that plaza. COR themselves have admitted in your paper that they ask for these types of incentives routinely. Will we have to ante up again in a few years?

If the county wants to help spur retail activity, then they can instead spread the million dollars that would otherwise be designated for COR evenly among all retail businesses in Genesee County, including the ones at Batavia Towne Center, to use as the owners see fit. One of the base libertarian principles is that people know best what to do with the fruits of their labor, not government and certainly not an unelected, semi-private-sort-of-public entity which appears to lead the County Legislature around by the nose. However, I would be against that as well, even though it would be better, because we will never get property taxes and government reined in if we continue to allow the GCEDC to choose who gets to pay less and who should keep on shouldering the rest of the load. Government costs keep rising, the population keeps shrinking and there is no magic powder. We can make Genesee County prosperous again, but we have to think differently, we can't keep trying the same tired old failed practices of the past. According to Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance and the author of “Big-Box Swindle”: “…between 1990 and 2005, the amount of retail space per capita in the U.S. doubled, from 19 to 38 square feet. In contrast ............. since the early 1990s, per capita retail spending, adjusted for inflation, has increased by only about 14 percent.” (Site www.ilsr.org/wp-content/uploads/files/msnarticle.pdf ) It appears to me that Batavia is a microcosm of this oversupply that has occurred around the state, and actually we are running about 8 years behind.

Let's take the lead instead, let's continue to find ways we can reduce government through privatization where feasible. It has worked with the ambulance service, it will work for the city's trash collection and it can work in other areas as well. Let's find functions that can be consolidated or eliminated completely. Ultimately, the goal should be a lower and lower tax burden on everyone in Genesee County. We can't control the state and federal taxes, but we can whittle away at our property and sales tax. If Genesee County has the lowest property tax rate and the lowest sales tax rate of our surrounding counties, what might that do for Economic Development, organically? We wouldn't need an EDC, and we wouldn't have to endure the chairperson of our county legislature making us a joke by declaring a shopping plaza a tourist destination.

Malign Libertarians if you must editor, but we are the ones who truly have a vision for the future of ALL Genesee County residents, and we are the ones who are advocating for freedom.

David Olsen, Vice Chairperson, Genesee County Libertarian Committee