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Local Feature

Services To "Buy" For
words By Jolen Polyack
images by Ryan Watamura

“Buy local” is used enough to be considered a cliché. Often, this rallying cry falls on unresponsive ears. And, as more and more people live in outlying communities and commute to the larger cities, less of the community’s buying power is actually spent in the city a commuter lives in.

We at Traffic Magazine wanted to investigate the “buy local” mantra. Does it really matter? Or is it just the local small businesses’ attempt at getting more revenue?
First we talked to the City Managers, of Kingsburg and Reedley. According to Kingsburg City Manager, Don Pauley, “People should buy in Kingsburg for a number of reasons; one is to support local business which supports the local economy. Buying local creates strong local businesses which generates interest for more retail development. Second, when a resident buys locally a portion is returned to the city and supports the local government services. More revenue to the city from retail sales tax means more dollars for police, fire, and public works. Public works includes street and park maintenance. When people buy gas at local gas stations a portion of the gas tax is returned for street maintenance. The city gets a significant portion of its street maintenance funding from gas taxes. Public safety benefits with the police department receiving an additional amount that is earmarked from the state which can only be used for law enforcement.”

Reedley City Manager Brian Nakamura added, “Buying locally helps provide more jobs for the community. People don’t always realize that.

If Reedley residents shop outside of Reedley, those tax dollars are utilized by another city. If you shop in Reedley, economists estimate that it recycles itself seven times. That means for every one dollar spent, it adds seven dollars to the community. That dollar provides for 1% of the sales tax. That’s not a lot per dollar but it adds up over time. If the business keeps 80¢ of that dollar and that 80¢ is spent on employees, then it too multiplies throughout the local economy.”

“From an economic perspective,” Nakamura continued, “to provide the economic base of the community, whether it be Reedley, Kingsburg or wherever – the strength or weakness of the local economy is something the community controls, not the government. What do you do as a family? You go out to dinner, you use the parks and the recreation services. Even as a bedroom community your residents should want to support the services that support the things they utilize. You might use a recreation program, a parks program or a service that the City of Reedley provides. By buying locally you’re helping to ensure that we can continue to provide those services in the future.”

Each city receives 1% of sales tax. In Kingsburg that is about $600,000 annually. For Reedley it equates to about $1.2 million annually. In Fresno County most purchases are currently taxed at 7.875%. Of that amount, .875% are taxes voted in by Measures B (libraries), C (transportation), and Z (zoo).

Therefore the city’s 1% general fund allocation comes from 7% of the retail taxes paid, or about .07¢ per $100.
After having the government officials weigh in, we thought it would be fun to test their theory. We started with a local Kingsburg resident who has lived here since 1966. Mary Hernandez is a Cashier for Kmart in Kingsburg.
Mary is paid by Kmart, who employs 85 people and, if they are within the national big-box averages, have an annual payroll of about $1.5 million. Mary knows many of her customers and enjoys letting them know when things are on sale. She likes hearing about their families, hobbies and lives. When Mary shops, she goes to places like Nixey’s Boutique, Our Stuga, Town & Country Market, and Albertson’s. She banks locally at Citibank. Mary tells us that the people at those local establishments treat her very well, know her by name and often like to converse about family too. Let’s say, for demonstration purposes, that Mary spends $100 at Nixey’s Boutique. The purchase has a sales tax of 7.875%. Since the .875% is for libraries, transportation and the zoo, we should only count 7% of the tax. This equates to $7.00. Of the $7.00 the City of Kingsburg receives .07¢ which will eventually wind up in their General Fund. Nixey’s Manager, Lindsay McIntyre lives in Kingsburg. With her paycheck she purchases from local establishments like Chevron, Anysthings, For the Birds and Lisa’s Mane Attraction. Let’s say her $100 purchase at For the Birds adds another .07¢ to the City’s coffers and so on. You get the picture.
According to Mr. Nakamura, as that money ripples through the Kingsburg economy on average of seven times, then Mary’s original .07¢ tax contribution to Kingsburg just sent the City .49¢.

So it seems that no matter what city you shop in, you will support that city’s local economy and subsequent services. The question is do you want to support the services that you and your family utilize? Or do you want to support the services that other people utilize?
In the end, we found that there were a variety of reasons to shop locally and that most of them really didn’t have to do with benefiting the local businesses. Instead, buying locally seems to have more to do with actually benefiting each resident on a personal level. The reasons included:
• Improved law enforcement
• Improved fire protection
• Improved transportation
• Improved parks
• Improved recreational activities
• Improved opportunities for other businesses
to establish locally because of the
vibrant economy
• Higher employment rate (which means lower crime rate and more dollars spent
within the community)
• Maintenance or improvement of the better quality of life you moved here to enjoy.

The next time your car needs to be filled with gas, consider purchasing it in your hometown. The next time you have ten things on your list and know you can only purchase three of them locally, purchase those three locally.

Your local purchases will directly benefit the services provided to you by your local government.

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