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Firms believe it is better to take from Manteca than to give

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POSTED October 22, 2013 1:32 a.m.

Giving isn’t a two-way street for some corporations.

If you doubt that, take a look at the heavy hitters here in Manteca.

Target plows 4.7 percent of pre-tax profits back into the communities they serve. That includes donations of products that help a multitude of organizations from youth sports to veterans group with fundraising endeavors such as silent auctions and raffle prizes for dinners. That translated into $146 million in cash and $63 million in product during 2010, according to The Chronicle of Philanthropy.

Wal-Mart is next on the list at 4.1 percent of their pre-tax profits going to charity. A few years back, a store manager noted local giving within a retail store’s service area was budgeted at $30,000 while the rest was distributed regionally or nationally.

Compared to the volume Wal-Mart does from a typical store, that is a paltry amount especially compared to the generosity of mom-and-pop businesses. But in defense of Wal-Mart, they make sure they give back.

Kohl’s is next on the list.

There is also a healthy sprinkling of local-based concerns — Manteca Ford and Cabral Motors are two prime examples — that generously give back way above the benchmark set by the big guys.

Target, Wal-Mart, and Kohl’s are examples of corporations that give back to the communities that help make them successful with their purchases.

Bass Pro Shops and Costco also give back but not anywhere close to the level of Wal-Mart, Target, or Kohl’s.

That would be OK since philanthropy shouldn’t be forced.

But in the case of Bass Pro Shop and Costco, they have decided it is better to take than to give when it comes to Manteca.

No matter how Bass Pro wants to spin it, they are benefiting from $18 million over 35 years that Manteca opted to give up in sales tax to get them to locate here. Granted well over 97 percent of that sales tax is on transactions that wouldn’t have occurred here if Bass Pro hadn’t built here. And it is an indirect subsidy since it went to developers of The Promenade Shops at Orchard Valley — Poag & McEwen — to allow them to cut a deal with Bass Pro. The book “Free Lunch” by Pulitzer winning reporter David Cay Johnston details how Bass Pro never locates anywhere without somehow extracting anywhere from $10 million to $25 million in concessions from local jurisdictions indirectly or directly.

Manteca’s deal with the devil, so to speak, was the cleanest of them all based on Johnston’s research. The way it is normally done is giving money upfront in the form of bond proceeds, redevelopment money or tax breaks. Manteca gave up 55 percent of what they would never have gotten over 35 years without losing out on property tax.

Yes, Bass Pro makes it clear they give to nature conservation, hunting and fishing non-profit endeavors. That’s fine. But if you talk to volunteers with local non-profits, you can’t even get Bass Pro Shops to donate a $25 gift certificate for a fundraiser. That shouldn’t be anyone’s concern normally but Bass Pro is essentially getting $18 million from the public  trough.

Costco is a little bit better. Why that should be anyone’s business is the City of Manteca made a sales tax split deal directly with the firm for 10 years to cover their costs of locating “prematurely” in Manteca. Yes, it is true Manteca retained retail dollars and sales tax that was going out of Manteca consumers’ pockets to Costco stores in Modesto and Tracy. And it is also correct that Manteca may not have gotten the next Costco store for the region that could have gone instead in Modesto or Lathrop. But even so, you’d think Costco would be a little bit more generous with local non-profits.

It’s ironic because Costco arguably hurt a lot of local mom and pops that are hit on constantly by non-profits — liquor stores, supermarkets, bakeries, tire stores, and such.

Bass Pro or Costco aren’t horrible corporate citizens. Their giving policies are structured much differently and either not directed locally or if they are — they are at a level much lower than the non-subsidized businesses in the community.

If Manteca continues to use tax sharing elected leaders should insist on philanthropy concessions in exchange.

It would be a concession that would give back to the community that is giving up revenue so they can succeed.

It doesn’t sound like a free market approach, does it? But then again directly or indirectly subsidizing a business with tax dollars isn’t exactly a free market situation either.

Yes, the rules of the game require such deals or else the Bass Pro Shops of the world would go elsewhere. Until Sacramento and state governments across this country radically reform how local governments are funded, such deals are going to continue.

Getting someone like Bass Pro that benefits ultimately by an $18 million sales tax giveback over 35 years to give one percent back a year to Manteca-based non-profits calculated on what the city gave them isn’t unreasonable.

That comes to $5,142 a year.

The odds are that amount is significantly lower than what some of mom-and-pop places do who gross less in a day than Bass Pro makes in a day at a typical store.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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