Lawrence sales tax collections post big gains; numbers suggest new Menards may be adding big totals to city; fast food chain reopens on 23rd

There are new sales tax figures out that will make you wonder whether my wife finally gave me the PIN code for the ATM at the bank. Yes, for the second month in a row, retail sales totals in Lawrence have grown dramatically.

Lawrence sales tax collections grew by 8.4 percent during the most recent monthly reporting period. Most of those sales took place in February or early March. (It is a big-ticket time period: Boxes of Valentine’s Day chocolates, March Madness big-screen TVs, cranes to move both.)

Whatever the case, the 8.4 percent growth in sales tax collections was one of the larger growth rates in the state. This is the second month in a row that’s been the case for Lawrence. Last month’s sales tax report showed growth of 7.4 percent.

As a result, Lawrence’s sales tax growth is outpacing all of the other large retail communities in the state thus far in 2016. Here’s a look at year-to-date growth percentages for some of the state’s larger retail centers:

• Lawrence: up 4.2 percent

• Kansas City: down 0.1 percent

• Sedgwick County: up 1.5 percent

• Johnson County: up 0.6 percent

• Salina: down 3.8 percent

• Manhattan: down 0.7 percent

• Lenexa: down 11.8 percent

• Topeka: up 1.9 percent

• Overland Park: down 0.1 percent

• Olathe: up 3.2 percent

The numbers are good news for Lawrence’s budget. City Hall is projecting sales tax growth of 3.7 percent for the year. So, at 4.2 percent, sales tax collections are on pace to come in above projections. If Lawrence continues to have a couple more months where growth is above the 7 percent mark, sales taxes could come in well above projections.

That would be helpful, because as we have reported, the city’s 2016 budget is facing challenges in other areas. The city’s general fund — the fund that pays for many of the city’s largest services — is projected to spend about $990,000 more than it receives in revenue in 2016. City officials aren’t likely to let that happen, which would mean city departments would need to make some midyear spending cuts to get spending in line with revenues.

As for what is driving the increased amount of sales tax collections in Lawrence, city officials are still studying that. One factor appears to be greater sales of construction materials. Sales tax collections from sales of construction materials are up 26 percent compared with the same period a year ago, according to preliminary numbers from the city. (Those numbers are from last month’s report. The detailed figures for this month’s report haven’t yet been released.) The big change that has happened in the past 12 months has been the opening of Menards on 31st Street. Is Menards bringing in that much more in retail sales? Is the presence of the retailer cutting down on the number of shoppers that previously were traveling outside of Lawrence for some of their home improvement needs? Or, is there another explanation for the large increase?

I’m not sure, but it would be interesting to get a more definitive answer. It could be instructive as the city weighs other retail proposals that may come to town. There has been a lot of debate about whether a store like Menards actually brings new dollars to town or simply takes dollars from existing retailers. Perhaps sales tax figures could help shine some light on that important debate.


In other news and notes from around town:

• If you like square hamburgers, then perhaps you like misshapen American flags as well. Yes, I am pretty sure the Constitution says something about hamburgers should be round, but since I can’t quite find that reference, I will share news about Wendy’s, the largest purveyor of square hamburgers.

There had been concern in the comrade community that the Wendy’s on 23rd Street was going out of business, as it had been closed for several days. Well, no need to worry. The business reopened on Friday. An employee there told me the restaurant had to close for some emergency maintenance repairs. It looked like a new sewer or water line had to be installed at the property.