Tax-Revenue Leakage Causes Re-Think of Big Box Ban
Since 2006, there hasn’t been a single big-box retail location built in Sacramento. Proponents of the big-box bans, who often are opponents of individual retail chains, would claim this as a victory. However, local government officials in Sacramento say that this ban led to tax-revenue leakage as neighboring cities welcomed various retailers’ expansions.
Most notable among the expansions has been the construction of three WalMarts since the de facto ban was implemented. Walmart built all three stores just outside of City limits, thereby avoiding the requirement to perform complicated and costly economic impact studies. Choosing West Sacramento, for instance, enabled business expansion while encouraging Sacramento residents to leave the City to shop. Quantifying how much revenue the City lost is difficult.
However, in the staff report accompanying the vote in the Law and Legislation Committee for the City, the shortfalls of the ban are clearly explained. First, big box stores such as WalMart and Target provide regional appeal, so simply limiting access in just one jurisdiction does not prevent the regional proliferation of the chains. Two, some of the main objections to the stores is their wage and benefit policies, which fall outside of the scope of land use policies.
The vote to ask the full council to weigh in on the issue was split, with two members hoping to wait on the State to act on its own version of the City’s big box ban. Wisely, however, Councilman Jay Schenirer preferred to never wait on the state for anything.
Read the full staff report at the City of Sacramento’s website.