Basalt’s economic suicide
June 29, 2011
The Basalt Town Council Tuesday voted to impose a fee of 20 cents on disposable bags distributed by the town’s grocery stores. It is another act of economic suicide by our local governments. One has to wonder what economy our officials inhabit. It’s certainly not the economy I see, one in which income is falling and costs rising.
Have the members of the Basalt council forgotten the saga of Town Center Booksellers? The bookstore closed two years ago, blaming lower priced online competition. The owners might have also blamed Basalt’s sales tax. Consumers purchasing a book at Town Center had to pay a higher price and then cough up additional money for Basalt. Online buyers pay no taxes. Basalt bid good-bye to Town Center as well as good jobs and sales tax revenue.
Basalt can prepare to bid good-bye to more jobs and tax revenues if it proceeds with its bag fee. Oh, I know that the members of the Town Council believe the public can be educated. One member, speaking in the same language once used by the leaders of the Soviet Union when talking down to its citizens, suggested “a big campaign to educate shopper on why disposable bags were being targeted.” Another member questioned whether shoppers would go downvalley to shop if Glenwood failed to go along with the idea.
The members of the council are wrong. Shoppers will not totally abandon Basalt’s two markets. However, business at these institutions will drop significantly as the experience of Town Center Booksellers reminds. Consumers will become more organized, scheduling a few trips to Glenwood or other markets.
An American institution, Wal-Mart identified this habit years ago. Executives at the firm recognized that they could capture a significant share of the consumer’s weekly food budget by offering lower prices. Consumers were willing to make long trips once or twice a week to save money. Countless numbers of stores have closed as a result. Many towns have lost significant sales tax revenues. Basalt will suffer the same consequence – but its losses are self-induced.
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Make no mistake: There is strong evidence that sales at Basalt’s markets will decline, employment will fall, and tax revenues will drop. Hopefully executives at Wal-Mart, Costco and stores in Glenwood will send the town thank-you notes.