Community budgets, services and jobs will suffer from Walmart’s unfair tax appeal

Walmart’s actions will jeopardize important programs and services that benefit residents

HOUGHTON, Mich. (March 2, 2023) – Last week, City of Houghton community leaders gathered to discuss the damaging impact their tax dispute with Walmart will have on a wide range of important community services. Because the potential impact is so significant on the rural Upper Michigan city, Walmart’s follow-up response to the media after the meeting did not inspire trust or confidence from city and community leadership.

If successful, Walmart’s actions will jeopardize important programs and services that benefit families, public education, veterans, the elderly, and their own employees and customers. Real outcomes due to loss of tax revenue include layoffs and/or program reductions in the local school district, a reduction of community library services, and Houghton County Medical reducing its budget to the equivalent of one full-time staff member salary.

Leaders of affected agencies are scrambling to forecast how to adjust budgets and identify potential cuts in services if Walmart prevails in securing a proposed tax refund and reduced future tax revenue. “As an administrator of the largest nursing home in the area, I can confidently state that every dollar matters,” said Kim Salmi, Executive Director of Canal View – Houghton. “What may seem inconsequential to outsiders can be the breeze that pushes us over the edge. Reduced nursing staff puts us at jeopardy.”

Houghton Police Chief John Donnelly expressed his frustration with Walmart’s insensitivities. “The Walmart store, by far, creates more police activity in our community than anything. Our officers respond to more than 250 calls there each year. Close to 10% of the police calls and resources are dedicated to Walmart-related activities.” Chief Donnelly continued, “We have a great relationship with the local Walmart management and will continue to support them.”

In 2006, Walmart expanded into a Supercenter, at which point both parties agreed to a property value, making this case unique among the many other lawsuits Walmart faces around the country. Since then, the City has paid a total of nearly $1 million, over $60,000 annually, for wetland monitoring obligations for the property around Walmart necessary for the corporation to expand and operate its Supercenter. Walmart is now seeking over $1 million in refunds from all local units.

The retail behemoth has launched a “dark store theory” tax appeal against the City of Houghton, claiming that their local store is not valued fairly. They are comparing the value of their building to properties now closed and out of business. Walmart is seeking to reduce the value of its Houghton Supercenter by over $5M to gain a six-year retroactive $1.2 million refund and a reduction in future property taxes from the community.

“The City of Houghton is prepared to defend our community against Walmart until they do the right thing and accept that their property is already valued fairly,” explained Waara. “The taxpayers and citizens are customers and employees of this store who have supported Walmart’s growth in this market. Just because they’re the world’s largest corporation doesn’t mean they have the right to pay less property tax.”

aerial view of the city of Houghton and lift bridge