Buy Local

Since the beginning of the recession, economic downturn or whatever you may want to call the current state of the economy, legislative leaders from local governments, statehouses and national politicians have begun touting “Buy Local” campaigns. Even before the economic downturn, cities like Las Vegas and Baltimore were experiencing shrinking tax revenue from on-line sales. In response, large “buy local” campaigns were started to urge local residents to keep tax dollars in the community.

In December 2008 and January 2009 Louisiana Governor Bobby Jindal and Baton Rouge Mayor Kip Holden hit the airwaves to launch buy local campaigns. These public service announcements were possible with free airtime provided by Cox media. Suddenlink Communications and local Alexandria stations teamed up to run ads touting the message that now is a great time to purchase a car. Noticeably absent, however, were any local elected officials leading a buy local movement. I do understand, however, that Alexandria is now launching some type of campaign called “Smartalex” under the direction of Mayor Roy’s community development team.

Why the sudden interest in buy local campaigns? With the downturn in the economy, cities are seeing tax revenue dry up from lost tax dollars generated from sales taxes. Car dealers are major contributors sales tax revenues nationwide simply by virtue of the dollar value of the items they sale. Simply put, car dealers generate millions in tax dollars every year for the state and local communities. In 2007 (the most recent year numbers are available), Louisiana car dealers put up some staggering numbers:

Average Dealership sales: $31.6 Million
Total Sales from New vehicle dealers: $10.6 Billion
Dealership sales as a percent of retail sales: 21%
Total number of new vehicle dealer employees: 18,210
Average number of employees per dealership: 54
Average annual earnings per employee: $43,342
Annual average payroll of dealerships: $2.33 Million

Slow car sales mean decreased tax revenue flowing to the city and local governments from sales tax revenue, corporate tax revenue, and payroll tax revenue.

Studies show that for every dollar spent locally the recirculation rate of that dollar in the community is many times higher than if the dollar is spent in another community. In other words, purchasing outside your community is supporting another’s tax base. Locally, automobile dealers employ several hundred people in sales, administrative jobs, as technicians, and managers. Average salaries at local dealerships are higher than the median wage in other industries. Moreover, local automobile dealers give generously to local charities. When local citizens go out of town to purchase automobiles, local tax revenue dries up, employment opportunities at dealerships shrink, wages go down and charitable contributions shrink.

Why is this important now? As you drive around the city look at the advertising license plates on the front and back of your friends and neighbors vehicles. Then look at your local politicians – police jurors, mayors, city council members, and school board members. Look also at your local business leaders – real estate agents, local shop owners, entrepreneurs, and corporate executives. What do you see? Are they are driving a car that they purchased out of town or from a local dealer? If from out of town, calculate the dollar impact this has on your community. How many direct and indirect jobs are affected by a single automobile purchase outside the community?

According to Donna Andries at the Rapides Parish Sales Tax office, tax revenues in 2007 from motor vehicles sales totaled $10,122,639. That number decreased 10% in 2008 to $9,051,975. Automobile sales in the Alexandria area year to date 2009 from 2008 are down 31.5% for domestic cars, 28.6% for import cars and 32.6% for trucks. Of course, a decrease in sales in 2009 is expected. However, the impact locally can be drastically reduced if those people who are going to buy this year do so locally instead of out of town.

On Tuesday, March 24, 2009 the Alexandria City Council debated a measure to use surplus funds to balance the budget for this fiscal year. Councilman Chuck Fowler noted that the reason for the buildup in the surplus was because of the increased tax revenue over the last several years. Councilman Fowler then specifically noted that usually sales taxes would increase, but this year an increase is unlikely specifically due to the decline in new car sales. This may mean decreased funding from the city for Mardi Gras, Downtown Rocks, the Alexandria Zoo, Art Walk and other discretionary programs that make our community unique.

Alexandria needs a buy local campaign and it needs it now. All of our public officials need to get behind the movement and support all of our local retailers regardless of size. Simply put, support you local business, their employees, and the charities that they support. Support those people and politicians in your community who buy local and keep tax dollars in the community to pay for the services we need and enjoy.

Walker is 90 - Happy Birthday

WALKER AUTOMOTIVE CELEBRATES 90 YEARS
IN CENTRAL LOUISIANA

By: Lawrence S. Searcy, Jr.

March 2009 represents a milestone for Walker Automotive as the local car dealership celebrates its 90th birthday. Walker was founded in 1919 as Alexandria Auto Company, Inc. by Foster Walker Sr. After returning from World War I, Foster Walker Sr. began selling Durant, Reo and Star automobiles from a gas station in Downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker III. Ninety years after its inception the dealership has expanded from its meager origins to three locations, 8 manufacturers, three service departments and a collision center. Over the last 9 decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

“We are committed to honesty and integrity in every facet of our business and it is this philosophy that has earned our company an outstanding reputation and longevity,” said Foster Walker III, President of Walker Automotive. Mr. Walker emphasized that as a fourth generation family company, Walker Automotive always tries to do what is in the best interest of its customers. “Our customers make it possible for us to be and stay in business and we realize that customer loyalty is the key to generations of success. We believe that we are rewarded for our efforts by the vast majority of our customers who are repeat and lifetime buyers.”

While the physical locations have changed the Walker business model has remained the same. “We celebrate this month with our 90th birthday and thank all of our customers, employees and friends who have made it possible for our company to be so successful,” Walker said. Various events celebrating the birthday are scheduled throughout the month of March.

Employee Free Choice Act - Really?

The Employee Free Choice Act – What Is It?

Again this year, the United States Congress is considering legislation to make it easier for union organization. The Employee Free Choice Act, (“EFCA”) amends the National Labor Relations Act “to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes.”(H.R. 1409) Any small business owner (or manager), regardless of the number of employees, needs to educate themselves on the potential impact of this legislation.

Over the last 50 years the impact of labor unions has been decreasing. In the 1950’s union membership hovered around 35%. That number has decreased to around 7.5% today. The membership decline is attributable, in part, to the number of federal laws that have been passed to protect workers from the abusive practices that once existed in the workplace. There are hundreds of federal and state laws that protect consumers, employees, and part-time workers. In the automobile sector there are no less than eighty-six federal regulations that apply to retail automobile franchises and repair shops.

In an effort to bolster union membership, organized labor is fighting very hard for the EFCA. In a nutshell, the EFCA changes the current law in three ways: (1) Recognition, (2) Negotiations, and (3) Penalties.

Recognition: The current law requires that employees sign union cards indicating their support for an organized union and then petition with the National Labor Relations Board to form a union. Both the employer and the union organizers then campaign for a period of 30 days either for or against the union. After 30 days, the NLRB supervises a secret ballot election and, if the union passes, then the company must recognize the union as the bargaining entity for the employees. The EFCA would essentially cancel the right of companies to campaign against the union. Instead, once the union has 50% of the cards signed, the company would have to recognize the union. No secret ballot. The fear is that employees would be pressured by the union to sign the card and any secret vote against a union would be lost.

Negotiations: Current law allows the parties to bargain for contracts in “good faith” and until a contract is reached the parties continue to work under the status quo. A contract is reached only when both parties agree to the terms. The amendment to the law would change this procedure. Instead, if a contract is not reached in 90 days the contract is sent to mediation (non-binding arm twisting). If after 30 days of mediation a contract is not reached then the matter goes to binding arbitration. The arbitrator will set the terms of the contract which will be in effect for two years. Here, the fear is that the terms may be so onerous that the company would be unable to meet the contract terms without serious alterations to the work environment.

Penalties: Under the new law the penalties are only enhanced for company violations not for union violations. Back pay awards are increased three times and fines could reach up to $20,000 per employer violation. Shouldn’t any change in penalties be reciprocal?
The law can be easily researched on the internet or by going to the Library of Congress’ web site http://thomas.loc.gov/.