City sees positive sign in sales tax numbers

Lawrence posts back-to-back increases of more than 3 percent

City budget-makers are breathing easier now that 2005 sales tax numbers are in and show a healthy 3.5 percent increase for the year.

City leaders have received $19.7 million in sales tax collections from the state in 2005, about $670,000 more than in 2004. Because of a two-month reporting delay in the state’s system, the numbers don’t reflect sales during the holiday shopping season.

But City Commissioner Mike Amyx, who owns a downtown barbershop, said he’s sensing consumers feel better about the state of the economy.

“I feel pretty good about it (the economy) from the standpoint of my business,” Amyx said. “I’m seeing some good signs in downtown. There’s a lot of people out. I think people just have more confidence.”

The 3.5 percent increase wasn’t as strong as the 5.4 percent increase posted in 2004, but it marks the first time in five years the city has posted back-to-back increases of more than 3 percent. From 2001 to 2003, the city failed to grow sales tax revenues by more than 3 percent in any year and actually saw a slight decrease in 2002.

“I think it has started to stabilize now,” Amyx said. “But I know my stomach still tightens a little bit when those numbers come out because it is a big part of the budget these days.”

Sales tax dollars represent about 40 percent of the city’s general operating budget, which is about twice the amount property taxes contribute to the fund.

This year’s collections are about $800,000 more than what City Manager Mike Wildgen budgeted to receive in 2005. Wildgen said the larger-than-expected sales tax totals would allow the city to replenish funds used for unexpected expenses, like the approximately $100,000 the city has spent to take over maintenance at Memorial Park Cemetery.

Wildgen said he probably would continue to be conservative in estimating future sales tax growth.

“We don’t want to overestimate any revenue source that we have,” Wildgen said. “We want to be as reality-based as we can. Predicting the future is fun to do, but you have to be real careful when you are talking about real dollars.”