Home Culture Economics Alaska’s Relationship with Walmart Obscured by Lack of Transparency

Alaska’s Relationship with Walmart Obscured by Lack of Transparency

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Photo by Mike Mozart, Creative Commons Licensing.
Photo by Mike Mozart, Creative Commons Licensing.

An April Americans for Tax Fairness (ATF) report criticized Walmart for being subsidized by American taxpayers, but a lack of public data from the State of Alaska makes it difficult to gauge the company’s relationship with the state.

In its “Walmart on Tax Day” report, ATF estimated that Walmart receives $6.2 billion per year because the government must fill the gap between what wages and benefits Walmart pays and what its employees actually need to live.

Among the programs included in the calculation are well-known means of public assistance, like Medicaid, the Earned Income Tax Credit, and the Supplemental Nutrition Assistance Program (SNAP, or food stamps).

ATF arrived at the $6.2 billion figure via a series of statistical leaps. First, ATF relied on a report  by the Democratic staff of the House Committee on Education and the Workforce. That report, in turn, relied on data from a single state — Wisconsin — that published Medicaid enrollment by employer. Walmart was highest on the list.

The Democratic staff analysis suggested that a Walmart Supercenter in Wisconsin would cost taxpayers between about $900,000 and $1.74 million annually. ATF then took the midpoint of those two numbers, divided by the number of workers at a Supercenter (300, according to Walmart’s website), then multiplied that by 1.4 million, the total number of Walmart workers in the U.S. (That number is now 1.3 million.)

That final step — the one that gets us to $6.2 billion — is the most statistically suspect because it assumes that Wisconsin’s cost per Walmart employee is appropriately applied to the whole country.

“Wal-Mart’s secrecy has produced a dearth of comprehensive demographic data on its employees. This makes an exact calculation of public costs for a hypothetical store impossible,” acknowledged the authors of the Democratic staff report in an endnote. “Our estimates depend upon a series of assumptions… Our analysis assumes discretionary programs are fully funded.”

Nevertheless, ATF uses Wisconsin’s data to estimate that Walmart workers in Alaska cost the state $15.2 million per year. Alaskans for a Fair Minimum Wage cited the $6.2 billion figure in support of Ballot Measure 3, a minimum wage ballot initiative that passed resoundingly.

What We Know and What We Don’t

Photo by Patrick Hoesly, Creative Commons Licensing.
Photo by Patrick Hoesly, Creative Commons Licensing.

Walmart has 13 stores in Alaska, eight of which are Supercenters and three of which are Sam’s Clubs. With almost 3,000 employees, Walmart is the second largest private employer in the state behind Providence Health & Services.

For its six stores in the Municipality of Anchorage, Walmart paid about $1.71 million in property taxes in 2014. (Assessments and tax records for Anchorage are available here.) It paid a further $233,200 for its store in Wasilla, $234,200 in Kenai, and $900,800 for its two stores in Fairbanks.

Property tax records for Walmart’s other Alaska stores are not available online, but if one multiplies individual property assessments in Juneau, Ketchikan, and Kodiak against their respective Mill rates (available herehere, and here), Walmart owed about $329,000 in property taxes to those boroughs before potential exemptions. (A mill rate is the rate at which one of every $1000 of assessed value is taxed.)

In total, Walmart advertises that it paid $14.4 million in taxes and fees from its Alaska stores this year, but that is not necessarily paid within the state. And if ATF’s estimate that Alaskans are paying over $15 million toward public assistance for Walmart workers is accurate, that’s a bad deal.

The people of Wisconsin have a much better idea of their relationship with Walmart because Wisconsin made employer data available. Other states that released data showing workers of private employers on public assistance include Texas, Utah, and Tennessee. Alaska is one of 26 states that have not.

Walmart also advertises that its average hourly wage for a full-time worker in Alaska is $14.12, $1.50 more than in Wisconsin. However, the company is notorious for withholding what percentage of its workforce is part-time and therefore less likely to be able to make a living or afford benefits.

Walmart defines full-time work as 34 hours per week.

Part-timers at Walmart are much more likely to be forced onto the rolls of public assistance programs. Walmart’s employee benefits handbook has even provided contact information for Alaska Medicaid enrollment. In October, the company announced that it would not provide any health benefits for 30,000 part-time workers starting in 2015. Medicaid will likely have to pick up the slack.

During his inaugural address on Monday, Gov. Bill Walker confirmed that the expansion of Medicaid in Alaska would move forward.

Walmart has also adopted a strategy of primarily hiring temporary workers in recent years. An anonymous store manager in Alaska told Reuters in 2013, “Everybody who comes through the door I hire as a temporary associate. It’s a company direction at the present time.”

Always Our Blue Buddy. Always.

Despite these concerns, the Alaska Department of Labor and Workforce Development put its stamp of approval on a Walmart recruitment event in Kenai on November 13.

And when Walmart threatened to stop carrying Alaska salmon in its stores, rather than scorch the company in the press or consider legal action, as he was wont to do for other causes, former Gov. Sean Parnell went to Walmart hat in hand to politely ask them to reconsider.

Perhaps one reason Alaska has not released public assistance data by employer is because it invests heavily in those employers. As of September 30, the Department of Revenue had holdings in Walmart stock equivalent to almost $4 million.

Walmart has employed a variety of lobbyists in Alaska since at least 2006. In 2007 and 2008, there was Jennifer Holder Spall at a cost of $50 per hour. Walmart paid Karianne Fallow $52.41 an hour in 2009 and 2010 to lobby on its behalf in Alaska. The company spent $65.10 an hour for the lobbying efforts of Angela Stoner in 2011 and $44.71 for Amelia McLear in 2012. McLear, a speechwriter for former California Gov. Arnold Schwarzenegger, got a seven dollar raise in 2013.

But the mainstay of Walmart lobbying since 2006 has been Frank Bickford. Walmart has paid Bickford as much as $66,000 in a single year to lobby in the state. Bickford has also lobbied on behalf of Intel, Verizon, and Altria, formerly known as Philip Morris. Alaska has holdings in these companies totaling $14.5 million.

ATF estimates that the amount Alaska taxpayers spend subsidizing Walmart could pay for 200 teachers. That sounds pretty great when the state faces a $3 billion deficit, but if ATF’s estimates are accurate, it is due to blind luck.

If Alaska wants to know what hosting employers truly costs taxpayers, it must release the data. Walmart is not obligated to do so. It is up to the pressure of voters and the will of elected officials to disclose whether Walmart is a bad deal for Alaska.

2 COMMENTS

  1. $4 Million in Walmart stock holdings isn’t very much… in fact it’s really quite small as a percentage of our total holdings. Furthermore, while Walmart is the de facto whipping boy, I suspect we could find similarly damning evidence of how Providence treats its comparable staff, i.e. retail workers and other low-skill jobs, or Target, or whomever. Also, releasing data showing where folks who are receiving public assistance work really provides no useful data, whatsoever.

    • Mr. Moore:
      The reason you are having to guess that other employers have a similar record to that of Walmart is because the state has not released the data. Knowing which employers are placing a larger burden on the state would allow departments to budget accordingly when a new business opens or give state and local governments the information they need before issuing a license to a new business. Taxpayers have been at a disadvantage in negotiations. If the state released data confirming that Walmart creates a disproportional societal burden, perhaps the new stores on Debarr or Tikahtnu Commons might not have been permitted, allowing the market to supply a more responsible employer.

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