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Archive for Saturday, December 1, 2001

Sales tax report buoys officials

City, county collections stay ahead of 2000 pace

December 1, 2001

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City and county officials say they feel like they have dodged the first bullet of a slowing economy.

Both Lawrence and Douglas County officials learned Friday that sales tax revenues in the month after the Sept. 11 terrorist attacks did not drop. Instead, they increased compared to last year, according to figures from the Kansas Department of Revenue.

ANNA COX, left, gives Andrea Moreau her receipt and purchase at
Hobbs Inc., 700 Mass. Both Lawrence and Douglas County officials
learned Friday that sales tax revenues in the month after the Sept.
11 terrorist attacks increased compared to last year, according to
figures from the Kansas Department of Revenue.

ANNA COX, left, gives Andrea Moreau her receipt and purchase at Hobbs Inc., 700 Mass. Both Lawrence and Douglas County officials learned Friday that sales tax revenues in the month after the Sept. 11 terrorist attacks increased compared to last year, according to figures from the Kansas Department of Revenue.

Despite fears the terrorist attacks may drive the country further into recession, sales tax numbers for the county increased by 4.4 percent in September compared to the same period a year ago, and by 3 percent for the city.

"The bottom didn't fall out. So far so good," County Administrator Craig Weinaug said. "But the next two or three months will really tell us more about whether this was a fluke or if things aren't as bad as we had thought."

Ed Mullins, the city's director of finance, agreed that although the news was good, it wasn't necessarily a solid indicator of what is in store for the local economy.

"The concern is still that the economy is in a recession and we don't know how long it will last or how deep it will go," Mullins said. "But it's good to get the money now anyway."

According to the state report, both the city and county are on pace to collect more sales tax revenue in 2001 than they did in 2000. The city is ahead of last year by about 3.4 percent, and the county is running 2.9 percent ahead of 2000 totals.

Those increases will allow the city and county to meet their budget projections for 2001, but questions still remain about whether their sales tax estimates for 2002 will be conservative enough.

"If we continue like this, we'll be in a little better shape than we thought we would be in," Weinaug said. "But how I interpret this is it doesn't mean we don't have a potential loss of sales tax revenue. It just means that it hasn't happened yet and that we still need to be careful."

Sales tax revenues account for about 50 percent of the city's $34 million general fund budget and about 17 percent of the county's $22 million general fund.

This week's report from the state was the first measuring any retail activity since the Sept. 11 attacks. Weinaug and Mullins both admitted they were awaiting the reports more anxiously than normal.

"Our curiosity was a little piqued," Mullins said. "We were interested to see the numbers."

"Let's just say that when I got this report I immediately compared it to the numbers from a year ago, where normally it might be a week before I get around to doing that," Weinaug said.

Reports for other major retail centers in the state were mixed.

Johnson County's numbers increased by 3.2 percent compared to the same period last year, but Sedgwick and Shawnee counties saw decreases of 7.5 percent and 5.1 percent respectively.

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