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Addressing the food market challenge … Bill offers incentives for grocers in underserved areas

groceryBy TED CARTER

A bill that has passed the Mississippi Senate and awaiting a floor vote in the House gives grocers tax credits and other incentives for opening stores in a vast swath of Mississippi underserved by food retailers.

Senate Bill 2840 sponsor Sen. David Blount said his legislation grew out of concern among legislators the past several years over an increasing number of Mississippians in economically distressed areas not having access to healthful foods. “Food deserts,” he said, can be found throughout both urban and rural areas of Mississippi, said Blount, a Jackson Democrat.


One recent study, for instance, estimated that rural counties in the Mississippi Delta average only one supermarket for every 190 square miles, forcing most low-income residents to travel 30 miles or more to buy affordable food in groceries and supermarkets.

SB 2840 won overwhelming Senate support and looks to have garnered bipartisan favor in both bodies since the start of the session, Blount said, though he conceded some lawmakers worry that mom-and-pop grocery stores could be hurt by the state subsidizing competing stores.

Blount said those fears are unfounded. The existing mom-and-pop would show up in the federal retail data collection system known as the North American Industry Classification System (NAICS), thus making a new store ineligible for the incentives, he said.

Census tract data on poverty rates would also be part of the eligibility calculation, according to Blount.

While the bill does not mandate a set percentage of food types to be sold, qualifying grocery stores must make fresh produce among the offerings, Blount said.

The job tax credit is a key component of SB 2840. Supermarkets that open in eligible zones receive a tax credit equal to 10 percent of the store’s payroll. The exemption can cover up to 50 percent of a store’s income tax liability annually.  Total tax credits are capped at $4 million a project.

SB 2840 also exempts materials used in building a grocery store in an eligible NAICS zone from sales taxes.

While “food deserts” have been discussed and studied for years, a pair of recent closings in south Jackson and Utica has brought new interest in the issue, said Katherine Bryant, government relations director for the American Heart Association Mississippi.

“We actually have weighed in” to support SB 2840, Bryant said. “The closing of the Kroger (on Terry Road in south Jackson) has brought a new focus on this.”

The Terry Road Kroger supermarket closed in February and the lone supermarket in Utica, a Sunflower, shut down in November.

Although the legislation opens the incentives to all types of grocery store ownership, supporters are hoping the incentives will appeal to established in-state food retailers such as McDade’s, Vowell’s and out-of-state chains such as Save A Lot, Bryant said. “We would really like it to be those that aren’t starters. It is so rocky of an industry to be in.”

In 2012, the 50-member Mississippi Grocery Access Task Force took a close look at Mississippi’s dearth of grocery stores, especially ones that offer fresh produce, and made nine policy recommendations.  The task force made up of food retailers, academics, public health professionals, civic leaders and economic development officials met for a year in compiling a report titled “Stimulating Grocery Retail in Mississippi.”

The report noted close links between Mississippi’s food deserts and high rates of obesity and diabetes. A map of Mississippi localities without food markets overlaid on a map of communities with the highest rates of chronic diseases would be “almost identical,” the Heart Association’s Bryant said.

Recommendations in “Stimulating Grocery Retail in Mississippi” included incentives similar to those proposed in Blount’s bill.

“Economic development programs should be made available and aggressively marketed to grocery stores and other retailers selling healthy food in underserved areas,” the task force said in listing its recommendations.

Elaborating on the recommendation, the report said, “The food retail industry needs public sector support to overcome the high costs and risks of new store development in underserved areas. However, few incentives from the State of Mississippi are available to retailers. Business tools, such as sales tax abatements on equipment purchases, property tax abatements, tax exempt financing bonds and low-cost financing, can encourage supermarkets to invest in underserved areas.”

The incentives should be aggressively marketed to grocers to encourage the construction and renovation of new and existing healthful food retail outlets throughout Mississippi, the report said.

The report further recommended adoption of a state-sponsored grant and loan program to support development, renovation and expansion of grocery stores in underserved areas. “Mississippi should seek to leverage seed capital from the state with additional public and private investment,” the task force advised.

The grants and loans could support workforce training, offset development and construction costs and fund soft costs including feasibility and market studies, according to the report. “The program should be flexible enough to meet the needs of any retailer with a robust offering of healthy food, including a variety of fruits and vegetables, dairy, meat and other groceries intended for home preparation,” the task force said.

Here’s a roundup of other recommendations for state and local governments in the “Stimulating Grocery Retail in Mississippi”:

>>> Expedite the transition from distribution centers to retailers for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Additionally, Mississippi should implement an Electronic Benefit

Transfer (EBT) system for its WIC program.

>>> Target workforce development programs that would create and retain jobs and support the needs of grocery stores and other retailers selling healthy food.

>>> Reduce regulatory barriers to grocery store development in underserved areas.

>>> Develop, in cooperation with the supermarkets, public and private partners to develop safe, affordable and convenient transportation for shoppers who do not have access to a supermarket.

>>> Collaborate with grocers and community groups to empower entrepreneurs and pursue distribution strategies to ensure that rural areas have convenient access to healthy, affordable food.

>>> Work with grocers, developers, law enforcement and the community to help ensure a safe and secure environment for both customers and store personnel.


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