Published: May 17, 2008 04:15 am         

Guest commentary: Have your tax rebate? Try spending it locally

About those rebate checks. They're in the mail. Several people I've spoken to have already gotten them, and undoubtedly, many others have, too.

Thanks to Congress and President Bush, many households are getting $600 or more in tax rebates, in hopes that we'll go out and spend it and help stimulate an economy that may be in the midst of a recession.

Economists have argued that this money will not have a jump-start effect on the economy as hoped, because many people may save the money, use it to pay down debt or simply spend it at the gas pump.

But Uncle Sam is hoping that most people will go out and spend the extra cash, and that as a result, corporations such as Wal-Mart and Home Depot, as well as the stock market, will get a boost.

Here in upstate New York, it generally feels as if what happens on Wall Street has little to do with what's happening on Main Street. I haven't yet heard a good argument showing that when corporate America gets a boost, much of it trickles down to our communities.

So why not instead use the $600 or more coming your way and turn it into a real stimulus for the local economy where we live and work?

Studies from Maine to Chicago to Washington have demonstrated that spending money on local products and with locally owned businesses has a multiplier effect on your money. While the products may be a bit more expensive (though not always), the impact is so great that supporting local business more than pays for itself in terms of increasing the net wealth of the region, including better jobs, a stronger tax base and a thriving community.

Money that you spend on Amazon or Netflix all travels out of the area, with no direct benefit to the community. When you shop at Wal-Mart, Home Depot or Borders (and no judgment here, I do too sometimes), some of the money that you spend stays in the area, mostly through the wages paid to employees and tax payments to the town.

The bulk of your dollars, however, goes to corporate headquarters to pay the attorneys, accountants, and managers, overseas to where the goods are produced, and to company stockholders.

Here's where you can make a difference. One study showed that for every dollar spent at a locally owned department store, hardware store or bookstore, the amount that stays in the local economy (circulating and creating new jobs and supporting additional businesses) is twice that of money spent at a corporate, non-locally owned store.

This is because a locally owned business is more likely to spend its money with local lawyers, graphic designers and accountants, and the profits to the owner also stay in the community.

If you decide to spend your $600 at businesses like Munson's or Sport Tech in Oneonta, Good Cheap Food or Stewart's in Delhi, or the Big M or Brooks Pharmacy in Deposit, it's like doubling that money to $1,200 in terms of its impact on your community.

An even better way to multiply your dollars is through purchasing locally grown foods from area farmers. Six hundred dollars could fill your freezer with meat for your family for the year or buy a season's worth of vegetables and enough to can or freeze for the winter.

Studies at Cornell University show that money that farmers receive for their products turns around from three to seven times in the community _ more than any other type of business.

And a study from the University of Washington demonstrated that a meal consisting of locally grown foods was responsible for significantly less greenhouse gas than the same meal from non-local sources.

The main reason for this was the impact of transportation _ most food in the supermarket travels an average of 1,500 miles before it gets to your plate. That's one well-traveled piece of steak! So take a local challenge. Keep track of how much of that $600 you can spend on local food or with a local business.

If even 1,000 people made a commitment to spend at least $600 extra on local products and with local businesses this year, we would have an impact of almost $2 million on our Main streets.

That's the kind of economic stimulus we can get excited about here in upstate New York.

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Kenyon, a resident of East Meredith, is a consultant on community development and on the board of Farm Catskills.