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A rebate request: Spend locally
Group of independent Valley businesses
calls for dollars to stay at home.
By Daryl Nerl
Of The Morning Call
February 20, 2008
A group of Lehigh Valley business owners is hoping to persuade you to spend most of
your federal tax rebate -- approved by Congress this month as part of an economic
stimulus package -- at independently owned, local businesses.
Those tax rebate checks -- up to $1,200 for middle income families, $600 for middle
income individuals and $300 per child -- will inject $263 million into the economies of
Lehigh and Northampton counties, according to the Sustainable Business Network of the
Greater Lehigh Valley.
Distribution of the rebate checks is expected to begin as early as May, according to U.S.
Rep. Charlie Dent, R-15. One must file a 2007 tax return before the rebate will be sent,
however.
The more that money is spent in local, independently owned businesses, the more the
Lehigh Valley will benefit from the economic stimulus, according to the network, a
year-and-a-half old organization that represents 60 such businesses. A group of
network leaders held a news conference Tuesday at the Clothesline Organic clothing
store in south Bethlehem to trumpet the message.
''These rebates are intended to stimulate the local economy,'' said Albert Wurth,
associate professor of political science at Lehigh University, who was there to support
the network. ''Consumers can maximize the local impact of that stimulus by shopping at
local, independently owned businesses.''
Though he could not confirm the $263 million figure offered by the network, Bethlehem
economist Kamran Afshar said the rebate checks will give a boost to the local retail
economy. Just how much depends on where and how the money is spent, Afshar said.
The effect of new retail spending creates a ripple effect that generates other new
spending by retailers and their employees, which economists call a multiplier. That
multiplier changes depending on what is purchased, but on average $1 in new retail
spending generates three times that much spending in the economy, Afshar said.
At the news conference, merchants and Wurth argued that more of that spending stays
in the Lehigh Valley if it is spent at local, independent businesses.
Troy Reynard, owner of the Cosmic Cup Coffee Co. in Easton, said he does everything
he can to stock his shop with locally produced items.
''All of our raw materials, milk, baked goods and paper goods are all available from local
farmers, local bakers and local printers,'' Reynard said. ''Residents who spend their
economic stimulus rebate checks at our or another independent business can be
assured that more of that money will stay in the local economy.''
Citing a study done in Austin, Texas in 2003, Wurth said the impact by spending in local,
independent businesses could be three times greater than by spending in a national
chain headquartered outside the Lehigh Valley.
Afshar acknowledged that there is a difference, though it may not be quite as great. The
main difference, he said, is where the profit goes -- a local business owner or a stock
holder, who might or might not be local.
''The reality is that if the business is owned and operated locally, obviously the profit will
remain in the Lehigh Valley,'' Afshar said.
In any case, the rebates are designed for maximum impact in retail. That is why they
have been directed primarily at individuals earning less than $75,000 a year and families
earning less than $150,000. People at those income levels are more likely to spend than
save or invest that money, Afshar said.
Most economists agree the stimulus package will have its intended effect, he added.
''We may have different ideas about how much,'' Afshar said. ''But we all agree it will
have some impact.''
daryl.nerl@mcall.com 610-861-3630
Copyright © 2008, The Morning Call
www.mcall.com/business/all-rebate.6279138feb20,0,494265.story
themorningcall.com
Group of independent Valley businesses
calls for dollars to stay at home.
By Daryl Nerl
Of The Morning Call
February 20, 2008
A group of Lehigh Valley business owners is hoping to persuade you to spend most of
your federal tax rebate -- approved by Congress this month as part of an economic
stimulus package -- at independently owned, local businesses.
Those tax rebate checks -- up to $1,200 for middle income families, $600 for middle
income individuals and $300 per child -- will inject $263 million into the economies of
Lehigh and Northampton counties, according to the Sustainable Business Network of the
Greater Lehigh Valley.
Distribution of the rebate checks is expected to begin as early as May, according to U.S.
Rep. Charlie Dent, R-15. One must file a 2007 tax return before the rebate will be sent,
however.
The more that money is spent in local, independently owned businesses, the more the
Lehigh Valley will benefit from the economic stimulus, according to the network, a
year-and-a-half old organization that represents 60 such businesses. A group of
network leaders held a news conference Tuesday at the Clothesline Organic clothing
store in south Bethlehem to trumpet the message.
''These rebates are intended to stimulate the local economy,'' said Albert Wurth,
associate professor of political science at Lehigh University, who was there to support
the network. ''Consumers can maximize the local impact of that stimulus by shopping at
local, independently owned businesses.''
Though he could not confirm the $263 million figure offered by the network, Bethlehem
economist Kamran Afshar said the rebate checks will give a boost to the local retail
economy. Just how much depends on where and how the money is spent, Afshar said.
The effect of new retail spending creates a ripple effect that generates other new
spending by retailers and their employees, which economists call a multiplier. That
multiplier changes depending on what is purchased, but on average $1 in new retail
spending generates three times that much spending in the economy, Afshar said.
At the news conference, merchants and Wurth argued that more of that spending stays
in the Lehigh Valley if it is spent at local, independent businesses.
Troy Reynard, owner of the Cosmic Cup Coffee Co. in Easton, said he does everything
he can to stock his shop with locally produced items.
''All of our raw materials, milk, baked goods and paper goods are all available from local
farmers, local bakers and local printers,'' Reynard said. ''Residents who spend their
economic stimulus rebate checks at our or another independent business can be
assured that more of that money will stay in the local economy.''
Citing a study done in Austin, Texas in 2003, Wurth said the impact by spending in local,
independent businesses could be three times greater than by spending in a national
chain headquartered outside the Lehigh Valley.
Afshar acknowledged that there is a difference, though it may not be quite as great. The
main difference, he said, is where the profit goes -- a local business owner or a stock
holder, who might or might not be local.
''The reality is that if the business is owned and operated locally, obviously the profit will
remain in the Lehigh Valley,'' Afshar said.
In any case, the rebates are designed for maximum impact in retail. That is why they
have been directed primarily at individuals earning less than $75,000 a year and families
earning less than $150,000. People at those income levels are more likely to spend than
save or invest that money, Afshar said.
Most economists agree the stimulus package will have its intended effect, he added.
''We may have different ideas about how much,'' Afshar said. ''But we all agree it will
have some impact.''
daryl.nerl@mcall.com 610-861-3630
Copyright © 2008, The Morning Call
www.mcall.com/business/all-rebate.6279138feb20,0,494265.story
themorningcall.com