To the editor:
Economics offers much to teach us. Dolph Simons’ Saturday Column of Aug. 28 states that Lowe’s would add sales taxes, jobs and property taxes. Economics shows this to be incorrect.
There is a finite number of people and income in Lawrence to provide demand for home improvement and other retail goods. Sales taxes are paid by consumers; vendors simply pass them through. Lowe’s would not add any people or income, so there would not be any additional sales tax revenues. The revenues from Lowe’s would simply be taken away from other stores.
Retail jobs depend upon spending, and the count of retail jobs have been going down slowly over time. Lowe’s would not change this. There would be a momentary increase in property tax revenues, but ultimately, the aggregate value of retail property depends upon spending, not the number of buildings. Lowe’s would not change this, and after a period of time, other stores would suffer a loss of value with no net gain to the city’s tax base.
For too long, the City Commission let retail space grow much faster than the growth of demand for that space. This is too bad. The surplus is causing blight and disinvestment throughout the retail districts of the city. Given this problem, there is no gain in adding to the surplus, and it will be a long time before we can absorb another home improvement center. The Planning Commission was right to stop Lowe’s.
We should learn from economics and plan accordingly.