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New report suggests Lawrence consumers were spending big during the holiday shopping season
Today may be the quintessential Lawrence day: A day where everybody takes a lunch break, and at least half the population never returns to work — thanks to either a green beverage or an orange ball. It will be a big money day in Lawrence, and a new report shows merchants have had a few of those recently.
While you may be focusing on St. Patrick, the latest sales tax report indicates Lawrence merchants may still be giddy from what St. Nick left behind. A new Kansas Department of Revenue report indicates retail sales during the Christmas shopping season were up significantly in 2016.
The city received its monthly sales tax check from the state, and the totals largely represented sales made from late November to late December. The report found that sales tax collections during that critical time period grew by 7.8 percent compared to the same period a year earlier.
It looks like shoppers in several Kansas communities opened up their wallets during the Christmas season. Sales tax collections for that one-month period from essentially Thanksgiving to Christmas were up 10 percent in both Johnson and Shawnee counties. In Wichita, the pace was a bit slower but still positive: 5.8 percent growth in Sedgwick County. The big exception was Wyandotte County, which is home to the mega Legends shopping district near the Kansas Speedway. Sales tax collections were down about 15 percent there.
While this one month period is particularly important to retailers, it is never wise to read too much into any one month’s worth of sales tax data. It is fairly easy to have reporting anomalies in a single month, but the number of communities that posted strong gains is a good indication that there was true improvement in holiday spending in the state.
State budget-makers certainly will welcome that. But city and county budget-makers probably are rooting for strong retail sales more than ever. Sales taxes are going to be more important than ever to local budgets. That’s because of the state-mandated property tax lid that will begin with 2018 city and county budgets.
As a reminder, the lid will require local governments in many instances to have a public election before using property taxes to fund new government spending. Cities and counties build their 2018 budgets this summer, and there is a real possibility that we could see elections — they would be mail-in ballots — in the late summer for both the county and city budgets.
There is discussion currently in the Kansas Legislature to alter the lid or even it repeal. So, we’re watching that and will bring you reports. But, the main point still stands: The current environment suggests sales taxes are going to be more critical than ever to growing communities.
Thus far, the news on that front has been good in Lawrence. Lawrence has now received two of the 12 sales tax checks it will receive in 2017. While that is a small sample size, the results have been encouraging and have continued the trends of strong growth we saw through 2016.
Year-to-date, Lawrence sales tax collections are up 7.3 percent compared to the same two-month period a year ago. Here’s a look at how Lawrence’s growth rate compares to some of the other large retail communities in the state.
— Lenexa: up 14.1 percent
— Topeka: up 7.4 percent
— Lawrence: up 7.3 percent
— Olathe: up 6.9 percent
— Johnson County: up 5 percent
— Sedgwick County: up 3.5 percent
— Manhattan: up 3.3 percent
— Overland Park: up 1.9 percent
— Kansas City: down 20 percent
It will be interesting to watch what happens the rest of the year with retail sales and also the attitude local leaders have about retail development. As I was writing this column this morning, I had to stop to report the breaking news that JCPenney has announced it is closing its Lawrence store. (See that article here.) That space, combined with the former Hastings space at 23rd and Iowa, does represent some fairly large vacancies along the city’s prime commercial corridor. How quickly they get tenants will be important to watch.
In the meantime, Happy St. Patrick’s Day, and enjoy your “lunch break.”