Archive for Thursday, April 23, 2009

Lawrence’s sales tax collections drop as economy weakens

April 23, 2009

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The city’s finances are starting to show new signs of a weakening economy.

After holding up well for most of 2008, sales tax collections in the first quarter of 2009 have fallen by about 2.5 percent from the same period a year ago, according to the city’s most recent financial report.

But the latest numbers aren’t yet a sign that the city will have to make a series of midyear budget cuts to make the city’s books balance.

“I’m pretty optimistic, based on what we see right now, that we’re not going to need to make any mid-course corrections,” Chestnut said. “The main reason is we’re being very vigilant in our spending.”

In the past two years, the city has made midyear adjustments that have affected social service funding and other city services.

The latest report shows that the city is in a better position this year to deal with revenue shortfalls because city departments have been spending less than their budgets allow. Through the first quarter, overall general fund spending totaled $11.7 million, down from $12.1 million in 2008.

“If we need to make midyear budget adjustments, we can do that,” Corliss said. “But the good news is that we’re moving into 2009 in better shape than we had budgeted for.”

The city likely has at least one more budget bullet to dodge. Chestnut said city leaders are becoming increasingly concerned that the state may again consider keeping about $1 million in liquor tax revenues that currently are slated to be distributed to the city.

“That number is so large that if we lose it, we would need to look at second-half budget reductions,” Chestnut said.

Corliss’ office previously has proposed a series of cuts including elimination of school crossing guard funding and reductions to many parks and recreation services to deal with the shortfall. But whether city commissioners would approve those cuts or create a new list is uncertain. The cuts were criticized by some candidates during the recent City Commission elections.

In other news from the city’s financial report:

• Ridership on the city’s transit system is up, but that does not mean that the amount of money in buses’ fare boxes is growing. Despite an increase in ridership on the T of about 10 percent, fare box revenue actually declined by about 7 percent or about $5,000 for the quarter. City staff members said that’s because much of the ridership increase has come from Kansas University students, who can ride the buses for free under a new city agreement with KU.

Ridership on the city’s paratransit system — which provides door-to-door service for the disabled — has decreased by about 2 percent. That decrease has helped lead to the overall decline in revenue, since paratransit fees are twice as high as regular fares for the T.

Comments

think_about_it 6 years, 2 months ago

I am sure that raising the sales tax rate will make more people shop here.

Alexander Neighbors 6 years, 2 months ago

Really ?..... what a big surprise..................

gccs14r 6 years, 2 months ago

AFAIK, sales taxes in KCMO are no lower than they are here. Besides, the difference between 7% and 8% tax on $2500 is only $25, the percentages are probably a lot closer than that, and any savings assumes that both the trip and your time are free. If the Federal mileage reimbursement rate is any guide, a round trip to KCMO costs about $42. Besides, the Lawrence job you save by shopping here might be your kid's.

think_about_it 6 years, 2 months ago

Not speaking for consumer1, only for myself here. I will not make any large purchases in this city to fund the emT even if the tax rate is higher somewhere else.Period.

George Lippencott 6 years, 2 months ago

Gee, if we taxed the $2M tax free bonus that KU is paying maybe that would help our tax situation. Taxes forgiven of one must be paid by others

gccs14r 6 years, 2 months ago

Even though you'd be paying for public transportation in Kansas City, instead? That's just stupid.

think_about_it 6 years, 2 months ago

I'm not the only one gccs14r. You helped vote in the tax increase. You go ride that piece of $hit albatross and pay for it too. Reap the whirlwind libtards. This town gets no extra money from me.

KsTwister 6 years, 2 months ago

How do you say "We told you so" without sounding arogant ? We can't; because City Hall doesn't listen anyway. Now have some more crow and figure out why it is worth a car ride to go elsewhere. We already did and rather enjoy it because usually it is more than worth it.

gccs14r 6 years, 2 months ago

So you're going to spend more in taxes, more in gas, and more time to go shop in another town because you're mad about the bus system? Even though all the extra money you'll spend will go to support someone else's bus system? I'll never understand Republicans' propensity for shooting themselves in the foot because someone else has shoes.

cowboy 6 years, 2 months ago

People shop out of town because there is greater selection of products and more competitive pricing . I buy a lot of building materials in KC cuz the stores in Lawrence are the "little' stores and don't stock all the items the "big" stores do. My family regularly goes to KC for dining because there is more choice and generally far better service than in Lawrence. Plus I don't like going downtown and dealing with the effing bums. Want more tax dollars , clean up downtown and let some retailers into lawrence. Your getting exactly what you wished for by trying to control a market.

lawthing 6 years, 2 months ago

Make pot legal then tax it! Problem solved

Hoots 6 years, 2 months ago

I'm shopping less with the new sales tax. It DOES make a difference and the same thing happened to Topeka when they reached the 8% range. There are many things I don't need now. Tax me too much and I vote with my dollars.

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