Study: Retailers lag in sales tax collections

Lawrence has been a leader in restaurants but a laggard in big box stores for nearly the last decade, according to a study presented to a city task force looking to revitalize the retail scene.

In 2009, general merchandisers in the city — which includes many big box stores and department stores — collected about $1.8 million less in sales taxes than would normally be expected in a city Lawrence’s size, according to the report prepared by city staff. Restaurants, though, collected about $1.8 million more in sales tax than would normally be expected.

Now task force members have to decide what — if anything — to try to do about it.

“We might need to focus on pushing the stuff that’s working,” said John Ellena, a local car dealer and member of the task force.

Task force members, though, said they wanted to look at the city’s development code to determine if it was discouraging larger projects. The code does include some provisions that directs the city to deny new projects of 50,000 square feet or more if there is evidence that the new project would push the city’s overall vacancy rate above 8 percent. It also directs the city when calculating that total to assume the new space will be vacant when it is built, even if a tenant has been identified.

“I think our decline in the general merchandise category might have some relationship to the provisions in this code,” said City Commissioner Rob Chestnut, who also is a task force member.

Some task force members, though, said Lawrence’s lagging nature in some categories might just be a function of the city’s population and its location between two larger communities.

Other data from the report included:

• Other retail categories in which Lawrence performed significantly better than expected in 2009: Gas stations, grocery stores and miscellaneous.

• Other categories in which city performed significantly worse than expected: Furniture and home furnishings, clothing and lodging.

• The retail sector accounted for 11 percent of the city’s gross domestic product in 2008, compared with 9 percent for the state and nation as a whole.

• When adjusted for inflation, retail sales from 2003 to 2009 fell by about 1 percent. The report compared Lawrence’s totals with seven other cities: Kansas City, Lenexa, Manhattan, Olathe, Overland Park, Topeka and Wichita. Only Kansas City and Manhattan saw increases during the time period. The other cities saw declines that averaged about 3 percent.