The age-old question, “To shop or not to shop?” is really no longer the question. We all know that shopping, at least to some degree, is a part of life. We shop for groceries. We shop for school supplies. We shop for clothes and shoes. We shop for purses, jewelry, hats and gloves. We shop for plants and trees. We shop for cars, insurance, dogs, birds…and so it goes. That familiar question, “To shop or not to shop?” sounds differently these days. Instead, the question is, “To shop online or to shop at the store down the street?”
While shopping online can be a convenience for many people, the economic impact of shopping locally has a domino effect on the vitality of communities. Parker Wheatley, Assistant Professor of Economics at the College of St. Benedict and St. John’s University, says it can even stimulate local employment, and thus, the local community and economy.
“When consumers buy more products locally, then businesses have the opportunities or ability to hire more employees,” Wheatley states. “As a result,” he continues “those people who gain employment then have the ability to spend more money in the local community themselves” therefore generating sustainability and growth to the local economy.
The State of Texas sales tax rate is 6.25%. Texas cities, counties, transit authorities and special purpose districts have the option of supplementing with an additional sales tax for a combined total of state and local taxes. This Sales and Use Tax is applied to all retail sales including rentals and leases of most goods. The local sales tax rate in the City of Temple is 1.50%; the rate for Bell County is .50% for a total sales tax rate of 8.25%.
Shopping in Temple at a local store front is an investment – an investment in our local economy and an investment in our community.
Investing in Our Economy –
Shopping in Temple proves to be a smart investment of retail dollars. “Nearing 29%, sales tax is our single largest source of revenue for the General Fund,” states Director of Finance Traci Barnard.
Sales tax receipts for fiscal year 2012 show an increase of more than five percent over fiscal year 2011. Similarly, sales tax revenue budget estimates for fiscal year 2013 predict a continued increase at five and a half percent over budgeted fiscal year 2012.
Even with these recent annual increases in sales tax revenue for our local economy, studies show that our community spends an average of 26% of their annual income outside of the community – online and/or in neighboring cities – on items and services available here in Temple. For an average household income of $48,472, that means the community loses over $12,600 per household in sales tax revenue every year.
We can correct it. Shopping locally is so much more than buying goods or services from a local retailer. Dollars spent at the store down the street have three times the impact on the local economy versus dollars spent shopping online. When we buy goods and services in a local store front, one and a half percent of the sales tax is reinvested directly back into our community. Another half percent is reinvested directly back into Bell County.
The money we spend in our community generating sales tax revenue exponentially increases across our local economy through business expansion, job growth, capital improvement, enhanced city services, and gifts to nonprofit organizations.
Investing in Our Community –
There’s nothing small about the effect local businesses have on the community. That’s not just according to the owners of those businesses. The “shop local” movement taking root across the state and throughout the country shows business owners and experts on that movement agree – what is good for local business is good for the local economy, the community and the customers.
Documented in a 10 year study from 2002 through 2012 by Civic Economics, an economic analysis and strategic planning consultancy with offices in Austin and Chicago, as the local economy grows it has a direct effect on our community services. The retail diversity study showed that local businesses reinvest in the local economy at a 60% higher rate than internet retailers. They support other local business professionals and retailers – bookkeepers, accountants, architects, attorneys, web designers, printers, caterers, and restaurants, to name a few – that internet sellers do not.
The study continued to reveal that neighborhoods served by successful businesses experience an increase in home values.
For purchases where quality goods or knowledgeable services are especially important, shopping at a local store front can reward buyers with a more satisfying experience and enhance the value received. Local shopping means that important decisions are made on site by people who feel the direct impact of each decision.
Local store front shopping builds strong neighborhoods by sustaining communities, linking neighbors, and contributing more to local causes.
A slight shift in purchasing habits is key to sustaining Temple’s unique character and bolstering our local economy. When faced with the question, “To shop online or to shop at the store down the street” the answer is to shop at the store down the street.
Our buying decision to shop local and generate local sales tax revenue can literally shape Temple’s future. Every purchase we make influences the retail landscape, and adopting a “Shop Local First” mentality will only have a positive impact. With only a slight change in behavior, that positive impact can be huge.
So remember, when it is time for the new hunting gear, new shoes with matching handbag, or that new computer, it is not just shopping – it is an investment in the community.