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Lawrence finishes year with best sales tax growth in the state; do we have Menards to thank?

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The sales tax numbers for 2016 are in, and they show Lawrence was perhaps the hottest retail market in the state — and that is before sales of the Donald Trump inauguration T-shirts and the replica Meryl Streep Golden Globe statuettes.

As we have been telling you all year, Lawrence’s monthly sales tax collections have been growing at a faster rate than any of the other major retail markets in Kansas. Well, cities across the state have received from the state their final sales tax check of 2016, and Lawrence has retained that distinction.

Lawrence finished 2016 with sales tax revenues growing by 5.5 percent, compared with 2015 totals. When you combine sales and use taxes (use taxes are the tax you pay when you buy something online and the retailer doesn’t charge you a sales tax) the city’s total collections grew by 6.4 percent. That’s not a record year, but it is close to it. Here’s a look at the growth rates from recent years and the total amount of sales and use taxes received by the city:

— 2016: up 6.4 percent to $27.3 million

— 2015: up 4.4 percent to $25.7 million

— 2014: up 5.5 percent to $24.6 million

— 2013: up 1.9 percent to $23.3 million

— 2012: up 5 percent to $22.9 million

The 2016 growth rate ended up being the best since 1998, when sales tax collections grew by a whopping 8.5 percent. (You all remember the glorious year of 1998, when we were buying Beanie Babies and our only Russian worry was whether Boris Yeltsin inadvertently would become trapped in a vodka bottle.) Those were good times for Lawrence’s retail scene. But it may surprise people that this last five-year period has been every bit as good. Even though it may not have felt as fun, Lawrence’s sales tax collections from 2011 to 2016 have grown by 23 percent. From 1997 to 2002, they grew by 21 percent.

If local governments have funding problems, they should not blame consumers or sales tax collections.

In 2016, Lawrence definitely didn’t have anything to complain about on the sales tax front. Here’s a look at how Lawrence performed compared with the other major retail communities in the state:

— Lawrence: up 5.5 percent

— Olathe: up 3.6 percent

— Topeka: up 3.3 percent

— Overland Park: up 2.7 percent

— Manhattan: up 1.8 percent

— Johnson County: up 1.8 percent

— Kansas City: up 1.7 percent

— Sedgwick County: up 1.1 percent

— Lenexa: down 2.5 percent

For what it is worth, it also appears sales tax collections strengthened as the year went along. For example, when I reported on sales tax collections in April, Lawrence had posted just a 2.9 percent increase, and Topeka, Johnson County and Overland Park all were in negative territory. All those communities saw significant growth in sales tax collections since then.

As to why Lawrence had such good sales tax numbers, 2016 was the year Menards opened its large home improvement store in south Lawrence. City reports note that sales tax collections on building materials sold in Lawrence were up 24 percent compared with 2015. Sales tax collections on vehicles and car parts sold in Lawrence were up 9 percent. And sales tax collections on grocery items were up 5 percent.

The building materials number is the most interesting. It is not definitive proof that the Menards store is causing people to keep more of their dollars in Lawrence, but that is what it suggests. If the city wants to study something else, a good topic would be how much money do Lawrence residents spend outside the city, and have developments such as Menards and Dick’s Sporting Goods helped lessen that number? You would think city commissioners would want to have that information before they decide whether to reject new shopping center developments, like the proposal south of the SLT and Iowa Street interchange, which is now the subject of a lawsuit.

• Now that we have year-end numbers, it also is interesting to look at just how much business the largest retail markets in the state did in 2016.

— Johnson County (Home to Overland Park, et al): $11.44 billion

— Sedgwick County (Home to Wichita): $9.01 billion

— Shawnee County (Home to Topeka): $2.94 billion

— Wyandotte County (Home to Kansas City): $2.59 billion

— Douglas County: $1.71 billion

— Manhattan (Manhattan is in two counties so I used the city totals instead of trying to combine the two county totals): $1.12 billion

— Saline County (Home to Salina): $1.11 billion

— Reno County (Home to Hutchinson): $947.73 million

— Leavenworth County: $685.85 million

— Finney County (Home to Garden City): $673.75 million

— Ellis County (Home to Hays): $622.11 million

— Ford County (Home to Dodge City): $575.84 million

— Lyon County (Home to Emporia): $465.41 million

— Geary County (Home to Junction City): $427.35 million

• And just because the warm weather has done wonders for my arthritic fingers and toes, I decided to do one more math exercise to pass along. Here’s a look at per capita spending levels in the large counties. I find the numbers interesting because they provide a little more context. A county like Johnson County should have a lot more retail sales than a county like Douglas County, if for no other reason than it has a lot more people. The per capita numbers give you an idea of how well a market is doing in terms of pulling in outside residents to shop, and they also may give you an idea of whether residents of the county have more disposable income to spend.

— Ellis County: $21,430 per capita

— Saline County: $19,931 per capita

— Johnson County: $19,718 per capita

— Finney County: $18,320 per capita

— Sedgwick County: $17,612 per capita

— Ford County: $16,660 per capita

— Shawnee County: $16,449 per capita

— Wyandotte County: $15,853 per capita

— Manhattan: $14,884 per capita

— Reno County: $14,873 per capita

— Douglas County: $14,485 per capita

— Lyon County: $13,959 per capita

— Geary County: $11,540 per capita

— Leavenworth County: $8,647 per capita

Lawrence obviously finishes in the lower half of that list. Some people would argue Lawrence is destined to always be low on that list because we are too close to major shopping districts in Johnson County and Topeka. Others argue that Lawrence could move up the list if it allowed more shopping developments to occur in Lawrence, thus giving people less incentive to drive to Topeka or Johnson County.

That’s an argument that likely is to continue. One thing that is a little more concrete: State numbers show that out of the 93 Kansas counties that have a local sales tax, 56 of them saw their sales tax totals decline in 2016. Douglas County ought to be pleased that it is not yet among them.

Comments

Alex Keiffer 4 months, 1 week ago

Regarding the list of per capita numbers given here, and what you said about Lawrence being on the bottom half of said list...maybe if the city had allowed the development of the K-Ten Crossing shopping center at Iowa Street and K-10/South Lawrence Trafficway, the presence of this would have improved Lawrence's per capita, as it would have indeed provided more retail (and perhaps restaurant) options. The city really screwed up by rejecting this development; Academy Sports & Outdoors, HomeGoods, and Off Broadway Shoes all showed interest in locating there, and even Old Navy (which previously closed in 2012 after having been at 33rd and Iowa streets) even was interested. With Hastings gone, K-Ten Crossing would have also given a bookseller (e.g., Barnes & Noble, Books-a-Million) ample opportunity to locate in Lawrence. Just something to think about here, but really, Lawrence, there is no excuse for you to not have approved the development of K-Ten Crossing. Your community has great potential, so you really ought to reconsider.

Sue McDaniel 4 months, 1 week ago

EXACTLY Alex!!! Ditto!!!! But they want to force everything out by Rock Chalk. How's that working for them?

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