After four straight years of struggling to keep up with inflation, Lawrence’s sales tax collections showed solid signs of a turnaround in 2004.

“We finally started to see some effects of the bounce-back in the overall economy,” said Ed Mullins, the city’s director of finance.

Revenue from the citywide sales tax grew by 4.7 percent in 2004 to a new high of $11.43 million. The increase beat the city’s projections by $700,000. City officials actually had planned for sales tax collections to drop by about 1 percent from 2003’s totals.

“It was better than we expected,” Mullins said. “When we prepared the budget in May 2003, the economy didn’t look too good. We thought it was best for us to be pretty conservative.”

Mullins said the 4.7 percent growth rate was significant because it outpaced inflation, which typically has been considered to be in the 2 percent to 3 percent range.

That hadn’t been the case for the last four years. In 2003 collections grew by 1.2 percent, by 0.4 percent in 2002, 3.7 percent in 2001 and 1.6 percent in 2000.

The 2004 numbers, though, don’t necessarily represent a boom in business. Maria Martin, executive director of Downtown Lawrence Inc. and owner of downtown’s Southwest & More, said business was slightly better.

“I think this past year there has been a bit of an increase the people we have seen shopping compared to 2003,” Martin said. “But from what I’m seeing, I think there are quite a few people being somewhat cautious with their spending. Nationwide there may be a bounce-back, but I think the average person is still not feeling it as much as we would like.”

But Martin said she was still encouraged by the uptick in city collections. She said it may be a sign of good things to come.

“It may be a sign that there has been a turnaround,” Martin said. “But if there has been a turnaround, I think it will be a few years before it is felt all across the board. It won’t be like the late ’90s anytime soon. Maybe that will never return.”

According to the city’s numbers, the rebound still has a ways to go before it reaches the growth rates of the late 1990s. From 1997 to 1999, the city experienced annual sales tax growth of 6.4 percent, 8.6 percent and 5.1 percent respectively.

Mullins is holding out hope that 2005 will be a strong year for the economy.

“The economist say that 2005 should be pretty good, but there still are a lot of factors out there that we’ll have to watch,” Mullins said.

Mullins said how consumers reacted to expected interest rate hikes by the Federal Reserve would be important to the economy’s success, as well as developments in Iraq and tenuous relations with several key U.S. trading partners.