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Archive for Thursday, April 22, 2010

Lawrence sales tax revenues down 5 percent in first quarter of 2010

City concerned but optimistic

Frame Woods employee Mary Ellen Kriegh, foreground left, helps Robin Gingerich choose some framing options for a family document Thursday. Sales tax collections in the city were down 5 percent for the first three months of the year, as consumers spent less in the sagging economy.

Frame Woods employee Mary Ellen Kriegh, foreground left, helps Robin Gingerich choose some framing options for a family document Thursday. Sales tax collections in the city were down 5 percent for the first three months of the year, as consumers spent less in the sagging economy.

April 22, 2010

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Lawrence consumers clamped down on spending in the first quarter of 2010, putting the city on pace for its largest sales tax decline in recent memory.

Sales tax collections — excluding the three new sales taxes voters approved last year — were down 5 percent for the first three months of the year, and leaders at City Hall said the numbers would mean more tightening of the city’s budget.

“We are concerned about the numbers, but we are pleased about our ability to manage our expenditures to our revenues for the past several years,” City Manager David Corliss said. “We plan on keeping that skill in 2010.”

But if sales tax numbers stay on their current pace, the cutting may have to go deeper than in past years. City leaders were hopeful 2009 marked the low-water mark for sales tax collections. The city saw a 3.1 percent drop in collections last year.

Sales tax revenue down

The city found that sales tax revenue is down 5 percent, which will likely prompt some adjustment to the city budget. Enlarge video

A 5 percent decline — if it stays on that pace for the year — would be the largest drop since at least 1995, which is as far back as the city has easily accessible sales tax data.

Corliss and his staff are betting that sales tax numbers won’t remain that low. Corliss has revised 2010 revenue projections for the city’s main operating fund downward by about $1.74 million. If Corliss assumed that the current sales tax trend would continue, revenue projections would have needed to be reduced by about $2.5 million.

Corliss said he’s seeing some signs of improvement in the economy, including 45 single-family building permits in the first quarter, compared to just 110 for all of 2009.

“I’m not talking about a boom here, but there are signs of a little more activity than we have had recently,” Corliss said.

If his revenue projections hold, Corliss believes the city will be able to manage the 2010 shortfalls without major service reductions. Instead, the shortfall likely would be covered through delayed equipment purchases, reductions of contingency funds and other similar cuts. Corliss said city layoffs also did not appear likely.

Some city commissioners also are optimistic.

“I still think there is some room for trimming,” Commissioner Aron Cromwell said. “Whether we see a 3 percent decline or a 5 percent decline, I think we’re still going to be OK.”

The city’s first quarter financial report also provided information on several other city funds, including:

• Water and sewer revenues continue to be virtually stagnant despite rate increases approved last year. Revenue from water and sewer bills increased by less than 1 percent for the quarter.

• Revenues from bus fares and bus passes for the city’s public transit system are down about 8 percent. Ridership, however, is up about 61 percent for the quarter — largely because the T is now allowing Kansas University bus pass holders to ride the city’s system for free. Expenses for the T also are down by about 9.4 percent, largely due to cheaper fuel prices.

• The city’s solid waste department continues to show signs of a financial turnaround. The trash service collected $336,000 more in revenue than it had in expenses for the quarter. Previously, the department was operating at a deficit.

• Wet and cold weather has hammered the city’s Eagle Bend Golf Course. Bad weather caused revenue to drop 41 percent for the quarter. The course operated at about a $120,000 deficit during the first three months of the year.

Comments

barrypenders 3 years, 12 months ago

'cept for sustenance, I purchase all of my items off the net. The 'Teamsters' love me at UPS. The guys at FedEx as well. As a Transformation Faux Transgendered Explicitus I like to Green fuel by not traveling around for purchases.

Stimulus, Conscientious Shopper, and Posercare live unprecedented

Darwin bless us

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Healthcare_Moocher 3 years, 12 months ago

Corliss and his staff are betting that sales tax numbers won’t remain that low. Corliss has revised 2010 revenue projections for the city’s main operating fund downward by about $1.74 million.


This guy has not been right about anything yet!

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Mari Aubuchon 3 years, 12 months ago

I suspect the weather had something to do with decreased sales as well. It is easy to put off making all but the most essential purchases when it is cold and snowy.

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beobachter 3 years, 12 months ago

I'm no economist, but I was under impression cutting cost would increase profits?

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jafs 3 years, 12 months ago

rt,

Wouldn't cutting your costs increase, rather than decrease, your profits?

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Flap Doodle 3 years, 12 months ago

How's that hopenchange working out for you?

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Richard Payton 3 years, 12 months ago

Most merchants are cutting cost thus reducing their profit ratio making it harder to stay in business. Fewer stores in Lawrence brings less sales dollars along with many people now shopping at the Legends at Village West. Why do people leave Lawrence to shop at the Legends (1) item not offered in Lawrence. (2) price is better at the Legends. (3) no meters to feed when parking. (3) more store choices. (4) tax rate was better but recent KCK vote which passed increase sales tax may affect that. (5) no mall in Lawrence which PADS in Lawrence didn't want. (6) more fun activities directly linked to shopping district examples: bowling & movie theater.

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kansasmutt 3 years, 12 months ago

I saw one right answer. The smoking ban in Lawrence did close several stores and eatery,s. More to come.

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truman1902 3 years, 12 months ago

This dip in sales tax revenue can be traced back to KU/Northern Iowa .."FINAL 32" tees & sweats are a tougher sell than say --"SWEET 16" logos. We've all become accustomed to sales of Jayhawk merchandise as a centerpiece for downtown registers.. 2008-09 seasons of NCAA tournament play delivered bumper crops for apparel sales....Not a terrible season, but we kinda peaked at the wrong time (Big 12 at the Sprint Center)..It'll come back, don't ya know! I got confidence!

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Kontum1972 3 years, 12 months ago

hey Merrill.....the city doesnt want those stinkin hippies here. so Bret took his show out of town....and they love him down there in arkansas.

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Kontum1972 3 years, 12 months ago

Hey...!!!!!!!!!!!!!........ wasnt the sell on the Ks.Lottery ..that it was going to increase revenue for the stinkin' state?

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jafs 3 years, 12 months ago

LadyJ,

There was an interesting 60 minutes some time ago which showed how companies train their overseas workers to minimize their accents, and give them Americanized names.

The problem is that so many companies outsource, you'll have trouble finding any that don't, unless you go completely local, which is hard to do.

But I agree that we should be encouraging companies to keep jobs in this country - perhaps we should penalize them if they don't, and/or reward them if they do. I believe there are some legislative proposals to do that.

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LadyJ 3 years, 12 months ago

"IT runs in cycles , here today , India tomorrow" I actually decided the other day,after having to deal with people in India over a problem, that from now on before I do business with a company that I would call first as if I was a customer with a problem. If it is answered by someone in India, I will look elsewhere. Maybe if consumers stopped dealing with companies outsourcing to India, the practice would stop. I found it funny that although the person I was dealing with was obviously from India and had a hard time communicating, they had first names like Nate and Debbie.

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Thinking_Out_Loud 3 years, 12 months ago

I suspect this can be linked directly to the smoking ban.

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volunteer 3 years, 12 months ago

I appreciate merrill's courtesy, sense of optimism, and ideas. It is so easy to get disheartened by the empty storefronts on Mass.

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Richard Heckler 3 years, 12 months ago

"The solution is not taxes... it is to reduce spending. If you cant afford it ... then dont buy it!"

Should this apply to the new water and sewer service to the airport?

How about the 31st street extension?

How about the new $88 million sewage treatment plant?

How about all that money spent on the Baur Farms retail project that is still NOT paying back the taxpayer? Retail was a flooded market years ago at the time Baur Farms was approved.

How about the bail out of the research lab?

How about the field house our tax dollar spenders are itching to spend and build?

All of the above are initially tax increasers and once projects are fininshed it increases the maintenance budget.

Should most all major tax dollar projects be put to the voters?

Too bad the state, city and county did not support the summer music festival at Clinton Lake that would bring thousands to town.

At least my idea does not require any new streets,buildings,water lines,traffic lights or more fire trucks. But my idea would bring people to downtown. Then they would spend a few bucks and go home. Visitors from surrounding communities would drop in just to spend a few bucks and enjoy Lawrence.

It's all about increasing sales tax revenue. If the cookie jars keep dropping user fees and sales taxes could be increased.

How many ways can we increase tax dollar revenues that would prevent loss of services,prevent people losing jobs,prevent increase in taxes and user fees and keep our cost of living in check?

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parrothead8 3 years, 12 months ago

@lawrenceguy40

If you tax less, poor folks spend more, but rich folks spend about the same. How does that help the bulk of people in this country? The rich get richer, the poor get poorer. The poor don't get much of a chance to accumulate wealth because the rich hoard it.

Get off your high horse and realize that at least half of your neighbors are hard working LIBERALS who pay their taxes just like you. The difference is that they give a darn about someone other than themselves.

If your hard-working neighbor was having a tough time, would you do what you could to help him out? I bet you would. So why wouldn't you do the same for any other hard-working American who is having a tough time? Are they not as worthy of being helped because you don't know them?

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lawrenceguy40 3 years, 12 months ago

If you tax more, folks spend less.

When will the liberal idiots ever learn that simple lesson? I guess they don't understand because most have lived all their lives spending other people's money. The entitlement mindset - blissful ignorance until the hard working taxpayers are bled dry and can no longer afford to fund their thieving liberal neighbors.

196

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kansasmutt 3 years, 12 months ago

Our business has seen a 3.0% growth over last years first quarter. The type of spending is a bit more of the not needed products, more of what people were looking at before the downturn. Some of this i have seen is due to people cutting credit card spending and using cash and we offer them a better deal for cash. It saves us credit card processing fees. Discounts mean less sales tax revenue. Most businesses are cutting prices to get more volume of customer spending. BUT with electric , water ,taxes , phone and other bills going up, discounts will go away by summers end. A tax hike of ANY KIND will destroy any hope of getting the buying back on track as it was in 2007 and before. I have also got feedback from our Missouri customers on the smoking ban. ALL or most will not be shopping in any Kansas stores as of July 1st. They enjoy being able to sit and have a smoke with our staff and feel Kansas has put a nail in its own coffin. They would be open to buying product online from home if we offer that. This may be another option for our business, but this is not what built our personable business. The road to business normal in Kansas , is going to be uphill and slick, and may not be possible again. Our state leaders have made it tough for most small business to operate in the black or even stay alive. I do not see anything to make me think things are getting much better this year or next. I see a trend of business failures to go on and i see some BIG businesses failing in the 2010 calander year. I don’t think our state leaders are even close to being on the same page as common business people. They seem to think things are peachy and sweet, just a small downturn. No need to cut staff or save money, it grows on trees ( tax payers paychecks ) .

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Healthcare_Moocher 3 years, 12 months ago

This is a typical governmental ploy... they are setting us up for a property tax increase. Remember the water plant out west we had to have....

The solution is not taxes... it is to reduce spending.

If you cant afford it ... then dont buy it!

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commuter 3 years, 12 months ago

Merrill- if you think these are ideas re so great, why don't to go into business and do them yourself and keep all of thye profit you think you will make.----Oh yeah I forgot--- You want US to pay for your pet projects.

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Flap Doodle 3 years, 12 months ago

Wear cheerful bright clothing when boarding the handbasket bound for the infernal regions.

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oneeye_wilbur 3 years, 12 months ago

merrill speaks of cultural districts and arts and people to follow, well, merrill, that aint' Lawerence!

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Richard Heckler 3 years, 12 months ago

Arts and cultural districts are an increasingly popular economic development tool for local governments across the country. When theatres, performing arts centers, museums, art galleries, and artist studios are encouraged to locate in the same neighborhood, the neighborhood becomes a magnet for the general public.

Restaurants, gift shops, and art supply stores soon follow. Commercial enterprises, such as graphic design studios, advertising agencies, and architectural firms are attracted to such areas. When localities can achieve a critical mass of arts-related activities in a single area, these neighborhoods are appealing to what is often called the creative class of workers, many of whom prefer to live in and at least in close proximity to the arts and cultural districts.

http://vaartsandculture.blogspot.com/

============================================================= Follow The Money

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Richard Heckler 3 years, 12 months ago

Nothing much will change if a bit of creativity does not surface. The glass houses are blurred.

This matter has been discussed several times. If the stores decide to stay open how will anyone know? It will take a while to catch on.

How about if the city tries to put some new life into downtown? Such as celebrate the change in seasons with appropriate landscaping. Have downtown Lawrence become known for its' horticultural wonders that might attract visitors. It happpens in some communities when azaleas decide to bloom. Lordy do the visitors love it. Azalea festivals are everywhere.

Evergreens evergreens evergreens. Spring blooms,summer blooms,fall/winter colors

Celebrate spring and spring blooms with a sidewalk sale event in April. Celebrate fall with yet another sidewalk sale. Do sidewalk sales during these periods in order to miss school breaks/vacation times.

Let's make millions from existing resources. Lawrence must do something to make up the loss that is suffered by home games being played in KCMO and school breaks.

Bike competition is doing its ’job… hats off. Did not need new roads for that.

Sidewalk sales are such a great opportunity for Lawrence. I say let's change it a bit. Let's have a full blown carnival. After all with home games being outsourced here's an opportunity to make some revenue loss.

Let's reorganize a little = make it crazier and even more fun when schools are in session thus more buyers/participants.

Block off Mass between 7th and 9th. Leaving numbered streets open.

Have musicians play from 11 AM til ?

Invite local nurseries, local farmers and artists to set up in the street. http://www.artsusa.org/information_services/research/services/economic_impact/default.asp http://www.philaculture.org/research/reports/prosperity-report * http://artskc.trabonstage.com/ACpublications.aspx

Bring on the local food and brew vendors as well!

Try to schedule these events on game days = more hectic,more fun for fans and more revenue for Lawrence

Why spring and fall? KU and public school is in session = more people available locally and from surrounding communities ( folks are back from vacations).

Have items inside the stores marked down some as well. Make the whole sidewalk sale visit worth while and fun.

=================================================

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Defender 3 years, 12 months ago

"There will be no turnaround this year or next for Kansas."

I'm not sure that is true. I am in the IT field (professionally certified in several IT fields), and I was out of work a year ago. Finding a job was very difficult at that time. you might see 20-25 positions in the KC-Larry-Topeka area listed on job sites each week. This is no longer the case. There are more than 100 showing up every week (careerbuilder, monster, etc) in this area. Good paying, skilled jobs. I think this is far better of an indicator than what you're citing.

Now as far as tightening the budget, I think people are still a bit scared, and are saving more instead of spending. The city DOES need to do the same, and there I completely agree with you.

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cowboy 3 years, 12 months ago

There will be no turnaround this year or next for Kansas. The midwest is slow in the big cycle of things. Slow to get hammered and quite slow to recover. Maybe Coreless has not read about the states budget issues , the school districts budget issues , Local jobs advertised at less than 15% of the volume of just 5 years ago , Folks taking 6 months to a year to find a job .

I suppose that the fat cats at the river front enclave are doing quite well and have a rosy view of things. While most businesses are having to cut costs / price to maintain volumes the city just puts in a couple tax increases and still can't hit the numbers.

Why not get serious about running a tight ship Corliss ? It's going to be a couple real tough years yet we continue to see huge spending proposals moving forward i.e. farmland , rec centers , library . Notice a lot of the spring listings on the bigger homes are not selling .

What has the city done to bring some jobs into town lately or all of you planning your vacations now. And how big will the water , trash rate increases be this year Dave ?

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barrypenders 3 years, 12 months ago

Poser's VAT will spice up his purse. This village should follow Posers que with a SPLAT implementation too! Special Provocative Larryville Added Tax will solve everything! 'Provocative' is as favorable as 'Stimulus' anyday!

Stimulus, Larryville PAD SpLAT, and Posercare live unprecedented

Darwin bless us all

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toe 3 years, 12 months ago

So easy to predict. Raise taxes and spending gets reduced. Normal behavior of a tax weary people.

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oneeye_wilbur 3 years, 12 months ago

LadyJ, the city does not understand what you are saying about utilities. If the city dropped the franchise fee on utlities, the locals would have more money to spend. The J/W never reports how much money is collected by the city for that franchise fee. and it is BIG. Both BIG for the city and BIG for the user.

Lawrence should set an example to raise sales and lower the sales tax. Start running the parking lots as a business. Start cutting employees and city hall and only if the school district does as well. If Lawrence took on a campaign to have the lowest property taxes in the state, many businesses would move here as well and their would be an increase eventually in tax increases.

Lower prices on goods sell volume. Lower taxes locally and make Lawrence a destination for shopping for all goods. Competition is not what Lawrence is good at.

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LadyJ 3 years, 12 months ago

When your electric, water, and heating bills go up, you have less to spend. As long as the state aproves over inflated rate increases, people will buy less. And then we have to pay sales tax on those. The executives of these companies are rolling in money. Get a clue.

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oneeye_wilbur 3 years, 12 months ago

JUst how do they differentiate sales from three approved last year. Sales is down period. This must be new math city hall is working with. Get used to a future drop in sales tax. As long as the state raises taxes, the city creates fees, likewise with visitors from other cities, then sales will drop someplace somewhere.

They just don't get . If one has $1,000 a month to spend and each governmental body keeps gnawing away at it, the someone comes out the loser on the retail end and the spender loses as well.

I'm curious as to how long the Kansas Sampler store will be in business, well as long as Raney keeps the rent low. Will this new place have postcards for sale that represent the many sights and sites of Kansas as well as Lawrence? That should be a real test of how much Kansas is sampled.

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think_about_it 3 years, 12 months ago

Another tax increase should make up for the difference.

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d_prowess 3 years, 12 months ago

I find it hard to believe that a 5% reduction will continue through the rest of the year. I bet we end 2010 closer to even with 2009 when the year wraps up. Just a prediction!

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