Newspaper Page Text
Back in March 2005,1 sat in the press gal
lery of the Georgia Senate reporting on the
debate over a bill to give t^x breaks to major
corporations that amounted to nearly $1 bil
lion over a 10-year period. I listened as a
lawmaker named Casey Cagle assured his col
leagues that this tax break measure would be
the greatest thing since the invention of the
cotton gin.
"It's pro-jobs legislation," said Cagle, who's
now the lieutenant governor. "It will ensure
we have jobs for the future. There's no loss in
revenue to the state of Georgia."
That bill passed the Senate and was signed
into law. Over the past decade, legislators
have approved many similar bills to give
tax breaks to such entities as Delta
Air lines, Gulfstream, Coca-Cola,
Aflac, Rubbermaid, and develop
ers of "tourist attractions." I
watched the debate on most of
these bills. Over and over again,
I heard the same arguments from
legislators: these tax cuts were
going to "create jobs" and "grow
the economy" and bring in so much
new business that the state wouldn't
really lose any revenues.
How did things work out in the real world?
Not very well. If there's one thing we should
have learned from the experiences of the past
few years, it is that tax cuts are not the for
mula for job creation.
Let's look at some numbers. For the month
of December, Georgia's jobless rate was 9.7
percent. The national unemployment rate was
considerably lower at 8.5 percent, and that
has been the case for a long time. For the
past 53 months in a row, Georgia's monthly
unemployment rate has been higher than the
national rate. The economy has been bad all
over, but with all of those jobs that the tax
breaks were supposedly going to create, you
would expect Georgia at least to be doing a
little better than the national unemployment
rate. Instead, we've been doing worse.
The belief that tax cuts are a magic elixir
that will generate jobs and turbo-charge the
economy is one that apparently will never die
among our elected leaders. In the opening
days of the session, it seems as if every legis
lator has memorized the talking point "We've
got to cut taxes to jump-start the economy."
The latest proposal is to eliminate the sales
tax on energy used in manufacturing, which
would amount to an estimated $150 million
for Georgia's businesses. Gov. Nathan Deal
said elimination of tire energy tax will "vastly
improve the competitive position of our
producers." - ^
I wish it were that easy. Georgia needs
thousands of new jobs, because our economy
has been in such a deep slump. It would
be fantastic if these jobs could be cre
ated simply by adopting more tax
breaks. Despite all the cuts that
lawmakers keep passing, however,
our employment record is still
much worse than the national
average,
- The outlook is not completely
gloomy. There were signs in recent
months that the economy in both
Georgia and the nation may be get
ting a littler perkier. The number of
people seeking unemployment benefits nation
ally has dropped to the lowest weekly number
since April 2008. In December, American
employers added 200,000 jobs, which was the
sixth straight month in which the economy
added at least 100,000 jobs. The national
unemployment rate of 8.5 percent is at a
three-year low.
In Georgia, there were also some positive
indicators as the unemployment rate declined
by a small percentage in October, November
and December.
It is interesting to note that Georgia's
improving economic numbers were recorded
during a three-month period when the
Legislature was not in session—-and did not
pass a single tax cut.
Tom Crawford tcrawford@gareport.com
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6 FWGPOLE.COM JANUARY 25,2012
WHAT'S UP IN NEW DEVELOPMENT
Why Wait?: I'm extremely wary of Atbens-
Ciarke County comivs loners' decisions to
absolve themselves of any responsibility to
be proactive with regard to the Selig project,
opting instead simply to wait for the results
jof a traffic study by Selig's engineers. While
the projected impacts of the Selig proposal
do need professional analysis, a hobbyist
traffic engineer like myself should be able to
anticipate the effects of the project at least
to the appropriate order of magnitude. In the.
continued absence of Selig's study, that's what
I've attempted to do. Fellow trip generation
enthusiasts should visit www.sandiego.gov/ -
planning/pdf/tripmanual.pdf and play along
at home.
What San Diego planners have provided
in this document is an abridged and publicly
available version of the Institute of Traffic
Engineers' Trip Generation Manual The for
mulas contained in both these documents are
based on observation and measure
ment of many sites across the country,
determining how much average traffic
is generated by different land uses and
during what time of day those trips are
most likely to occur. I plugged Selig's
project in, and here's what I got. (I
encourage you to check my math—and
Selig's as well, whenever they release
their study.)
By my count, between 7,000 and
12,000 new auto trips will be brought
to the area per day, in addition to
the comings and goings of people
already traveling by who might stop
into the complex on their way. The
range between the figures reflects the
difference between using San Diego's
numbers for an urban core location,
or more standard-suburban averages.
Given that we don't have San Diego's
healthy urban streetcar network and
density, it seems likely that the true
count might lie closer to the upper end
of that range.
Assuming my math is right, how
might that play out? Well, most of
those trips would likely utilize three-
laned Oconee Street, which already
handles about 27,000 cars a day.
Another 8,000-10,000 trips would
push it up toward the high 30,000s. For com
parison, that's the level of traffic that the
seven-lane portions of the Atlanta Highway
handle, according to GDOT sampling near
Georgia Square Mall and Epps Bridge Parkway.
Of course, the busiest times for stores like
Walmart are in the afternoon and evening, as
everyone's getting off work. That's also when
Oconee Street, with its single eastbound lane,
is most congested. That one eastbound lane
is a primary way that workers get from down
town back to the Eastsidg suburbs.
Already, GDOT is proposing that Lexington
Highway be widened to seven lanes at the
loop as part of that interchange's redevelop
ment. Can we expect the same to happen all
the way down Oak/Oconee and into down
town, thanks to Selig and Walmart's traffic? Go
ahead and budget any increase in property
or sates tax revenues toward mitigating all of
those headaches.
Whose Pie?: Another frustrating fallacy is the
notion that Walmart's minimum-wage jobs will
be an economic stimulus that will somehow
"make the pie bigger," as George W. Bush put
it People won't buy more groceries if Selig
builds this. No new dollars will come into the
community from out of town. There will simply
be a redistribution of existing sales away from
other businesses, many of them local. Despite
the head-in-the-sand approach of our govern
ment data again and again bear this out.
According to a 2009 study by the Loyola
University's Center for Urban Research and
learning on the effects of an urban Walmart
on existing area businesses, "in an urban set
ting, proximity to Wal-Mart is associated with
a higher probability of going out of business
for local retail establishments... A business
in the immediate proximity of Wal-Mart had
about a 40 percent chance of closing some
time over the two year period."
Mayor Denson should walk into every store
downtown and flip a coin. Heads, she moves
on. Tails, she hands them a job application
to Walmart, because they won't be working
much longer.
The Loyola researchers also found that the
opening of the store resulted in the loss of
about 300 jobs as those businesses closed,
again pointing to the fact that the pie does
not get bigger. Revenue is simply redirected
away from local and small businesses, and
into the pockets of the big box. Of course,
it's not specifically that it's Walmart; it's the
"supercenter" business model, which Target,
K-mart and others also employ, albeit less suc
cessfully than the BentonviUe variety.
. The bottom line is that a 94,000-square-
foot box is too big to play nicely in the local
economy. It will alter the economics of our
town for years, bankrupting local business
owners and tying up millions of dollars in
traffic improvements. If Selig were sincere
about wanting to help Athens (they aren't),
they would find a Way to finance their project
with a much smaller anchor that fits into the
landscape in terms of scale, traffic impacts
and collateral economic effects (they won't).
We all need to accept the fact that we're mak
ing a dangerous gamble’ by passively acquiesc
ing to Selig's proposal.
Kevan Williams ath6nsrising@flagpole.com
While supporters of a downtown Walmart claim that the new
store would produce many new jobs, studies continue to show
that Walmarts result in net losses of jobs. How will exisitmg
nearby businesses and their employees be affected?
KEVAN WILLIAMS