Data to digest
Percentage increases in sales-tax collections from July through January in area communities, according to the Kansas Department of Revenue:
¢ Manhattan, 31.6 percent.
¢ Junction City, 25.6 percent.
¢ Kansas City, 12.5 percent.
¢ Topeka, 2.3 percent.
¢ Lenexa, 1.7 percent.
¢ Leavenworth, 1.6 percent.
¢ Overland Park, 1.3 percent.
¢ Leawood, 1.3 percent.
¢ Lawrence: 0.6 percent.
¢ Statewide: 8.5 percent.
After years of priding itself as an economic engine driving sales for all things taxable - from clothes to food to hand-crafted beers to building materials and including dozens upon dozens of other products and services - Lawrence is finding itself slipping behind compared to some of its larger competitors in the state.
According to the latest report from the Kansas Department of Revenue, Lawrence's growth in sales-tax receipts since July came in at 0.6 percent.
That lags behind the 31.6 percent for Manhattan and 12.5 percent for Kansas City, Kan., and all seven other communities that constitute the state's largest retail marketplaces: Hays, Hutchinson, Olathe, Overland Park, Salina, Topeka and Wichita.
It's also off from the statewide growth of 8.5 percent.
"That's not good," said Pat Oslund, a research economist at Kansas University.
But what does it mean?
With elected officials preparing to compile their operating budgets for next year, and major projects - an expanded Lawrence Public Library among them - being discussed as candidates for sales-tax financing, the answers could prove pivotal in the coming months.
We checked in with observers of sales-tax data to see what they say the numbers may indicate for the community.
Chuck Magerl
Proprietor
Free State Brewing Co.
Magerl, whose brewery in downtown Lawrence celebrated its 18th anniversary Friday, finds plenty of worry in the numbers coming out of Topeka.
First off is the relative standing of Lawrence in relation to its major-community colleagues. Lawrence's thinkers need to mull the numbers, consider wide-ranging factors and try to understand what they might indicate so that policies or practices can be implemented or adjusted to help turn the figures around.
"We can't be complacent," said Magerl, who maintains a database of tax data and commiserates with others about their meaning. "What concerns me is that so many people in this community walk around, strutting their stuff, saying, 'I live in Lawrence. Everything is great here.' The reality is, we've hit a real soft spot."
Magerl discounts assertions that Lawrence needs more retail storefronts to draw more sales. But he does worry that Lawrence's high percentage of tech-savvy residents increasingly are turning to the Internet for shopping.
He's also watched the area around the Kansas Speedway in Kansas City, Kan. - featuring commercial powerhouses Nebraska Furniture Mart, Cabela's, Great Wolf Lodge and The Legends shopping center - draw Lawrence residents and siphon away some of their discretionary spending.
Even Topeka to the west, with sales-tax growth of 2.3 percent during the past seven months, compared with the same period a year earlier, is continuing to absorb Lawrence money.
"It's starting to feel like those two areas are drawing more retail sales and sucking some of the vibrancy out of our community," Magerl said.
Dale Willey
Owner
Dale Willey Automotive
Willey doesn't need more than a second to come up with his conclusion.
"I don't know all the answers," he said, "but I know part of the answer is our construction industry has left town. They're building out of town, and they're spending their money out of town."
With the nationwide real estate market having slowed from its red-hot activity in recent years, builders often found themselves with too many new homes on hand and too few buyers to pick up the slack. Builders took out four permits for new homes last month, down from the usual 40, according to the Lawrence Association of Home Builders.
With developers, builders, contractors and suppliers increasingly turning their attention to growing portions of the Kansas City area and even Manhattan and Junction City - home to the expanding Fort Riley - it's no wonder the community's overall sales growth checks in at less than a percent, he said.
"That's a big engine for our community," he said.
Pat Oslund
Research economist
KU Institute for Policy and Social Research
Oslund, who follows state and local policies, acknowledges that the housing slowdown has had an effect on overall sales. Building supplies represent a major chunk of taxable transactions.
Factor in relatively slow employment growth with likely Internet sales, she said, and "that probably goes a long way toward explaining the slowdown in sales tax revenue."
But the housing slowdown remains the likely candidate for the biggest impact.
"It had been so strong in Lawrence," she said. "Even now, if it's average, that still represents a decrease."
Dean Drennan
Owner/operator
Mr. Goodcents Subs & Pastas
Drennan, who owns two sub shops in Lawrence, can see how the state's numbers would be legitimate. His January sales in town were up 1 percent from a year ago, less than in his other stores in Raytown and Kansas City, Mo., and below the 3.5 percent he normally expects in Lawrence.
He figures it might be high fuel prices, given Lawrence's increasing status as a bedroom community.
"If your gas spending goes up 15 percent, it would cut down on your discretionary funds," he said.
Kirk McClure
Associate professor
KU graduate program in urban planning
The relatively sluggish growth of Lawrence's retail sales is not a matter of too few storefronts, McClure said.
Instead, he said, the community is grappling with both an overall slowdown in population growth and wage increases that also are lagging behind the state average.
"That's where the real issue is," McClure said. "Population and wages will dictate your retail spending, not the number of stores."
Comments
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KS (anonymous) says…
This town is too liberal and too expensive. Folks don't want to live here. They don't want to have to commute to either JoCo or Topeka for their jobs either.
nut_case (anonymous) says…
Maybe they should just raise taxes some more...that would surely offset any dip in spending. Put a few more things on the 'banned' list, and add a dozen more cops that do nothing but patrol traffic. Then make sure the lights are totally out of sequence on 23rd st, so traffic is really calm..and can't even move. We'll have to throw up a bunch of crappy sub divisions right up near the interstate to hold all the people that want to move here then!
JOEHAWK (anonymous) says…
Part of this might be due to the new sales tax law that makes vendors charge sales tax based on where the product is delivered. I own a company that does mail order business all over the state. I have taken about $20k in sales tax each year reported to Lawrence is now reported in other taxing jurasdictions. the other thing is that online sales that uses the states web service does not report sales to Lawrence, only the county. Lawrence produces but it is now losing tax dollars due to the new sales tax law.
average (anonymous) says…
I always wonder how other towns do it. The town I grew up in has not added one person in 30 years. Same with the town my father's family is from in New Jersey... bounded on all sides, and population roughly the same for 100 years. They both seem to be functioning just fine.
But, according to the shakers here... we must keep growing and growing. 80,000 isn't okay... 100,000 won't be either, not 300,000, not a million.... it's constant growth or it's failure.
sourpuss (anonymous) says…
This was a really interesting article, and it might come as a surprise to some of you that Boog and the liberals had pretty much nothing to do with tax receipts falling.
Those that pinned the drop on the builders leaving town have it half right, but this is part of a national trend, and Lawrence is overbuilt, period. Even if we let anyone build anything they want, people still wouldn't build here if they couldn't sell the house. Real estate is very soft right now and Lawrence was built up in the 80's and 90's. With the price of gas rising, people are probably tending to live closer to work, so Topeka and Kansas City reap the benefits because they have industry (that isn't real estate).
No, the problem Lawrence has is that it always relied on real estate to keep its economic engine running. This was bound to happen if the national economy ever took a hit. Lawrence needs to attract business, but it can't due to poor infastructure and both state and local ordinances.
Lawrence is going to have to be smart in the next couple of years, and I don't think the leadership is in place for that. SLTs and new libraries are not going to fix the problem. We need to aggressively sell Lawrence as a place to do a variety of business.
The basis of your economy should be diversified, just like your stock portfolio. We put too much into real estate and now it has bitten us, but these decisions were promoted over 20 years ago, so don't go blaming the people that took the reins at the end of the ride, when the outcome was inevitable. The only thing you could try to blame them for was a hard landing, but actually, I think the current leadership is doing okay at keeping things from utterly crashing by imposing a few limits to ease the blow... or would people like 100 MORE empty homes in Lawrence now?
cowboy (anonymous) says…
I read that Lawrence now wants to be an all american city , why not start by allowing Independence Day celebrations with traditional fireworks , back off your I want to control everyone's behavior with the smoking ban , let business open up without a bunch of communistic committees telling them how to do it or that they can;t do it , get rid of at least 50% of the frigging committees that do nothing but add complexity and stall projects.
Families are leaving Lawrence due to the high costs and moving where their dollar goes further , young families qualifying for a 150,000 first home loan aren't looking here , their looking in Eudora and further east and south , professionals are leaving due to the slim job opportunities.
I think I heard there are 480 homes listed for sale right now and thats before the spring rush has hit.
Look at the annual losses of enrollments in USD 497.
The JW last year had an average of 300 employment ads per day , now its in the 150-170 range
Sales tax revenues down while our neighbors are up
construction fueled over 30% of jobs , now thats gone
the city is in debt and we are actually talking about a 30 mill library
This are needs a major course correction and all of the indicators point to that while the city commission sits on its thumbs listening to airheads like Kirk McClure and Burress.
Throw the bums out and get this city breathing again.
just_another_bozo_on_this_bus (anonymous) says…
Cowboy-- read sourpuss's post above if you want a more realistic assessment of the situation than your breathless hysteria.
cowboy (anonymous) says…
Seems that the regional trend is one of increased revenue , but Lawrence is one of decreased revenue,
The numbers don't lie , and every other indicator says the same thing !
But the local ostriches still think all is good and the sand feels good around their heads
Godot (anonymous) says…
Spouse and I are going to Johnson County this afternoon to go shopping.
ronwell_dobbs (anonymous) says…
Don't forget that about 20 years ago Olathe was in the exact same situation. Rapid expansion and poor planning created nothing but a HUGE collection of subdivisions with essentially no light industrial, manufacturing, high-tech, or other non-retail businesses. Santa Fe west of I-35 was a horribly run-down boulevard.
Now look at the office parks, Garmin, uber-big-box retail, etc. that fuels a very healthy economy. I never thought I would hear it that Olathe is a highly-desirable place to live.
Lawrence is facing the same struggle as many towns its size (and some even smaller) -- stay in the "traditional" mode of a college-centric town or "grow up" to be something that resembles the ticky-tacky, bland homogenous retail, humpback house, cul-de-sac wasteland that I believe Olathe has become.
Face it, folks -- trying to create a community that is now approaching 100,000 strong to be the ideal place for everyone is just plain impossible. We get out of a community what we put into it. There seems to be so much bitterness towards those who actually stand up for something, anything, that it shouldn't be quite a surprise that the best and brightest eventually decide they don't want contribute their thoughts and ideas.
How about we ALL just back off for a bit, hold our tongues, quit complaining (especially in anonymous forums), and turn Lawrence back into something we all want to be a part of? Huh? Is this too much to ask? Hell, just start by attending city council meetings in person, writing your city commissioners, meeting your neighbors, form associations, and vote.
As some rather clever soul said, "Rome was not burned in a day". Things take time. Let's set the mark as of now and see how much better things can be next year at this time. Sounds Pollyanna-ish to ya? Oh well. Sit back and let things change without you involvement. That'll show 'em.
christie (anonymous) says…
High Prices coupled with Lousy Service.
Double Gas Prices coupled with Low wages.
That just about sums it up.
justtemp (anonymous) says…
Aren't the Manhattan/Junction City numbers skewed by the large increase of military personnel stationed at Ft. Riley? Isn't there a building boom in that area to provide housing now? Too bad that wasn't mentioned in the story.
just_another_bozo_on_this_bus (anonymous) says…
"Aren't the Manhattan/Junction City numbers skewed by the large increase of military personnel stationed at Ft. Riley?"
Yep-- it has absolutely nothing to do with some sort of "enlightened policy" of the local governments there.
As with every boom, there will eventually be a bust. Someday, the number of troops stationed at that base will be reduced, and that will result in empty houses and abandoned storefronts, and the property values throughout the area will drop as the blight spreads.
On a much smaller scale, that's what we're seeing in Lawrence now. We've been living in the boom of building a bedroom community for people who work in Topeka and KC. That market has now been pretty well exhausted, although the growth addicts still don't want to admit that they've built us right into a "bust."
nbnozzy (anonymous) says…
Face it folks, Lawrence is no longer a "liberal" city. It hasn't been for over 10 years. It's more of a complacent town run by a majority of facists commisioners. Until the regular "joe's" wise up and vote dem-bums outs, we'll get the same negative policies that have been ruining my once beloved city into the ground. The current commision is doing nothing to build a better community. We are losing tax base, population, potential employers, etc.... for the retarded ideas of the socialist utopia that the 3 stooges strive for in Larryville. I am going to be very glad that Rundle will be out of office soon. He's the worst of the worst. Now let's vote out and show Highberger and Schauner the exit door at City Hall.
LogicMan (anonymous) says…
Here's some ideas, but are in direct opposition to "no new storefronts needed":
1) Bring in Sam's Club. That's where I do my big shops -- now in Topeka and KC. The field behind Wal-Mart comes to mind as a potential location.
2) Build a Lowe's on the NW side of town. Would provide some competition for HD, and help get people moving on their home improvements again.
3) An Aldi's in both north and east Lawrence, and a Trader Joe's somewhere.
4) An Ikea at the Tanger site.
5) A Red Lobster, probably in one of those new vacant buildings in front of Home Depot or maybe Pier One since they are closing.
6) Another Spangle's, in the old Unos building.
7) A gas station on the _west_ side of southern Iowa. (KU: consider leasing-out your corners at 23rd/Iowa, 15th/Iowa, and 15th/Kasold for gas/convenience stores/banks)
8) A Pep Boys auto parts store, probably on eastern 23rd.
9) Get that tool/import store on east 23rd to partially convert to a Harbor Freight Tools (already in Topeka and KC).
10) Encourage to CVS to start building already at Iowa and 23rd!
11) Bring back 7-11 to town.
12) Build something (bank, used car lot, ...) at that old Mazzio's site on the east side of Iowa St.
13) A small, ritzy indoor mall in west Lawrence (w/Gucci, etc.). And a small BMW/Mercedes/Audi dealership (probably a branch of the Topeka dealer).
to name a few ... but of course, "no new storefronts are needed".
sourpuss (anonymous) says…
I agree with Bowhunter... we need more inventive retailing, but a different sort that what is attracted to downtown, which is very specialized shops shored up by restaurants and bars.
Lawrence could also use an actual movie theatre instead of that piece of $&*# on south Iowa. I wouldn't pay $1 to see a movie there, much less the going rate. Liberty Hall might have really bad screens, but at least you get to see stuff there you can't necessarily catch anywhere else (though they are getting competition from KC as well).
Lawrence could also do better attracting small conventions. These bring in a lot of money. Hopefully, the remodeling to the Holidome might help that.
Lawrence could also liberalize whatever local restrictions are keeping movie and television producers away. These industries bring in gobs of money, despite the inconvenience of working around a shoot.
Doing these things could help very much in the short term, if you can manage to sell them. Attracting businesses is a longer-term problem, but Lawrence could try to get in on the ground floor of alternative energy production, recycling manufacturing, and other newer industries looking for sympathetic communities in which to set up shop.
srj (anonymous) says…
I find it interesting the major factor in the economy doing well the last few years is the building boom, and now that the economy is doing better, the main thing holding it down is the housing slowdown.
But problems can be fixed. I don't think the city has alot of debt.
KsTwister (anonymous) says…
Let me hear just once more how well sales is doing since their ban drove people to out of town restaurants,bars and hotels. What goes around comes around. Overtaxed families are leaving, quality of life is better when you can take them to a movie or restaurant instead of paying to fix the suspension on your car or paying taxes for pipe dreams. Then a stupid living wage issue. Most people would be more willing to begin a job paying $9.00 an hour if it meant after their 30 days on the job it would climb to a realistic $11 or more in a year. In the case of their parks-build it and they will come.....I don't think so.
just_another_bozo_on_this_bus (anonymous) says…
"Lawrence could try to get in on the ground floor of alternative energy production, recycling manufacturing, and other newer industries looking for sympathetic communities in which to set up shop."
Carey Maynard-Moody has suggested the same as part of her platform.
The economy of the not-so-distant future is going to be much more locally based, and much less energy intensive. Communities that recognize that now and start planning for it will be the ones that succeed. The ones that try to cling to the old models will struggle mightily, and that's exactly what the "power elite" candidates for city commission would have us do.
merrill (anonymous) says…
One of the problems is all the new housing that some have mentioned is it has increased the cost of community services dramatically. 20 years ago John McGrew explained how the Lawrence economy was solid and had been through thick and thin. Now we have a bedroom community which is tied to all surrounding communities dependent on cheap gas. The real estate/development community created this problem with 20 years of wrong decisions. Three city commission candidates are backed by this special interest money as we speak.
Building permits were up in 2006 over year 2005.
Inflated property values,thus inflated property taxes plus building crappy constructed new homes isn't exactly friendly and this has been going on for about 20 years maybe more. Sooner or later it catches up. Wonder if this construction has moved to Junction City,Eudora and/or Ottawa?
Yesterday we were looking at a 90 year old farm house with a T-111 siding attachment. The old lap siding looked great considering it needed a paint job. The T-111 siding was rotting in several areas. T-111 must be high maintenance material.
cowboy (anonymous) says…
the numbers don't lie , the progressives have run a diamond into the shi++er.
dump the commissions , put the neighborhood commies in their proper place and turn this town around.
VOTE this week for a change in direction
just_another_bozo_on_this_bus (anonymous) says…
"dump the commissions , put the neighborhood commies in their proper place and turn this town around."
Translation: return to the days of rubberstamp commissions.
jonas (anonymous) says…
Huh, have I stumbled upon Anecdotal Hell or something/
TruthSeeker (anonymous) says…
Nice try concrete. You must not know it when you're fed a line of hornswoggle. Do the developers use you as a night stand or a coffee table?
Schauner and Highberger will be back in and the vitality of Lawrence will be stronger with the onset of "Smart Growth". God will look down on Lawrence and say "It is Good"!
fsbchuck (anonymous) says…
It's good to see a few great thoughts buried within the common schlock of open forums like this. This should be a continuing discussion rather than a 3 day rant. A few more thoughts - the main generators of sales: general merchandise (Wal-Mart, Target, Weavers), cars (Dale Willey, Auto-Zone), food (Hy-Vee, Merc) and food service (McDonalds, Milton's), are any of these down in Lawrence, and if so, why in Lawrence and not Topeka or Salina?
In food, the Wal-Mart effect is a known factor. Prices of groceries drop in communities when Wal-Mart opens a grocery department, as competition pushes prices lower. Is this a bad thing? Do people hold on to the extra dollars as savings, do they go out and spend them on new shoes, do they use them to pay taxes, or do they save them for a vacation in Colorado?
Given the population growth in Lawrence, and consumer price inflation, what should be the percent increase in sales that indicate status quo? It's clear that 0.6 percent means fewer widgets are being bought in town than last year.
Is Lawrence simply a leading economic indicator for a trend we'll soon see in other cities around the State and nation?
Is it a bad thing that people may not be buying as many cars or refrigerators as last year? If consumers reign in their purchases could that temper the concerns about negative savings rates and that threat to long-term economic balance?
How many retail sales clerks or car salesmen lose their jobs or don't get a raise if sales flatten? We know the impact on jobs in the auto manufacturing industry as a result of the slowdown, but we're removed from that. How many Sprint employees are there/were there in Lawrence?
Community economics is a wonderfully complex web of how we interact with each other and our environment. It's never static, often surprising, and always worth questioning. I hope all who post here are willing to keep open minds and not rigidly believe they already know all there is to know.
just_another_bozo_on_this_bus (anonymous) says…
Excellent post, fsbchuck. You point out exactly why city commissioners, regardless of who gets elected, are really in no position to affect very many of the economic forces that affect the local economy.
But they can have a huge effect in pumping up the short-term profits of those in the cancerous growth industries, which is why they have been pumping so much money into this campaign.
cowboy (anonymous) says…
chuck you are right on many points , there are numerous issues in any budget that work against you or surprise you in the course of a year or few year period. This is all the more reason you cannot afford to pick and choose which revenue producers you are in favor of defined by a narrow political agenda.
You need every plus factor you can garner to offset the negatives. The current commission has developed a bad reputation for the city of Lawrence , it is having an impact and steering away business. The deepest impact is once that cycle has begun you don't even know who you have lost because they won't even make the initial effort to explore a location.
The apologists care not to look at any facts and are in major denial of the impact they have had.
just_another_bozo_on_this_bus (anonymous) says…
"The apologists care not to look at any facts and are in major denial of the impact they have had."
There are no facts-- just baseless hysteria.
just_another_bozo_on_this_bus (anonymous) says…
"Seems like a moot platform, since by your own words, the commission is a powerless entity."
The city commission, as structured, functions as a rudder with no propulsion system. That rudder can be used to steer us in a direction that helps all citizens, or it can be steered in a direction intended only to allow the cancerous growth industries to maximize their profits. It can't do both.
cowboy (anonymous) says…
We accept your apology Bozo
just_another_bozo_on_this_bus (anonymous) says…
Does that silly comment mean that you concede that your position is undefendable, cowboy?
merrill (anonymous) says…
Building new store fronts does not necessarily accomplish any additional revenue or jobs simply because the same quanity of retail dollars is still the same. Not enough to keep everybody open,up and running at a respectable pace.
Building new store fronts does make the real estate industry money if they are able to sell or lease...that's about as far as it goes. Considering some in the know say we are 30% over built.
cowboy (anonymous) says…
No Bozo it means that no matter what this city and your buds do you will defend and offer a lame reason why they can't have any impact on it.
Apologist
a person who argues to defend or justify some policy or institution;
just_another_bozo_on_this_bus (anonymous) says…
Is this thread still broken?
just_another_bozo_on_this_bus (anonymous) says…
Guess not--
Does that silly comment mean that you concede that your position is undefendable, cowboy?