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Downward Spiral

Growth doesn't always mean more revenue


America is beginning to look the same from sea to shining sea. Nearly every city's core shopping area is based on a formula: One Wal-Mart, one Best Buy, one Target, one Krispy Kreme, an assortment of Chevron, Texaco or Exxon stations, a Pottery Barn, a Container Store, a Toys-R-Us, Babies-R-Us, Starbucks, Barnes and Noble, Borders ... you get the picture. Is it good for the economy? Maybe nationally, but apparently not on a local level. A new fiscal impact analysis conducted by Tischler and Associates, an economic planning and consulting firm, has determined that a proliferation of "big box" stores creates an annual local economy deficit of $468 per 1,000 square feet of retail space for a community. In other words, they generate less tax revenue than it costs local governments to service them. Corporate fast-food establishments are even worse, generating a community dollar drain of $5,168 per 1,000 square feet. In contrast, smaller, locally-owned specialty retail stores generate more in taxes than they cost local government.

"This study shatters the common misperception that any sort of growth creates revenue," says Christopher Cullinan of Tischler and Associates. "Communities often talk about development in terms of the new revenue it will bring, but they rarely give serious considerations to the on-going costs of servicing that development."