Revenue giveaway puts small businesses at a disadvantage while shorting public safety, youth programs, and libraries
LANSING — Local officials in Houghton are sounding the alarm over the latest “dark stores” fiasco, telling MIRS News this week that their community is facing a “potentially devastating property tax appeal” by Walmart that will likely result in dramatic cuts to vital services such as public safety, schools, and veterans’ programs. Municipalities around the state are trying to cope with this disastrous tax policy, which has been wreaking havoc on local budgets for the past decade while lining the pockets of some of the world’s wealthiest corporations.
In 2013, a group of political appointees on Michigan’s Tax Tribunal reportedly got together and devised a tax loophole at the behest of Big Box retailers and their lobbyists. This “dark stores” scheme allows massive, billion-dollar companies like Walmart to lower the amount they pay in local property taxes by arguing that the market value of their operating store should be based on the sales of similarly sized “comparable” properties that are vacant and abandoned – and may not even be located in Michigan.
“The people of the Upper Peninsula have been fighting against unfair tax clawbacks for the last decade,” said State Representative Jenn Hill (D-Marquette). “Local governments fund the most essential building blocks of our lives – services such as police, fire, parks, and schools. The dark stores loophole allows massive corporations to sidestep support for these essential services. It’s time to hold them accountable.”
“Why are we valuing a brand new store as if it was an abandoned, vacant property?” asks John Petkus, an Upper Peninsula Houghton [[?]] resident and Chair of the Board for [[job title]] at Center for Change Northern Michigane. “Walmart is one of the wealthiest corporations in the world. Why do we need to raid budget funding for firefighters, libraries, and youth and senior programs that help kids and seniors to give a billion-dollar company a tax break? It’s outrageous and patently unfair.”
According to MIRS, Walmart is seeking to have the valuation of its Houghton location lowered, which would give it a $1.2 million refund and a reduction in future property taxes. If the company succeeds, it means Walmart will end up with a 60 percent reduction in its property taxes.
A similar effort is under way in Big Rapids Township after Walmart petitioned the Tax Tribunal for a reduction in its 2020 property taxes. As a result, township officials said they will lose about $1 million in badly needed tax revenue.
“We’re always hearing about mom and pop businesses that can’t stay afloat in the face of competition with Big Box stores, yet we’re handing our tax dollars over to very profitable corporations like Walmart. This is not the way to spur economic development. We need these companies to pay what they owe so we can invest our tax dollars in local programs and infrastructure, which will increase our residents’ quality of life and uplift us all,” said Audrey Gerard, a Houghton County resident and Organizer at Michigan United.
Fund MI Future is a joint effort of community organizations, unions of working people, and policy experts. FMF is working to create shared prosperity for all Michiganders by fully and fairly funding our public services like schools, roads, and clean water.
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