Sales growth in Lawrence continues to slow and to lag behind area communities

photo by: Nick Krug

A cashier hands a receipt back to a customer after a purchase at Lawrence's Sunflower Outdoor and Bike Shop in this file photo from July 6, 2017.

I know May used to produce lots of big spending in Lawrence, just with the graduation parties alone. (Mine was a huge surprise party, as in everyone was surprised the envelope actually contained a diploma.) Maybe graduation parties aren’t what they used to be. Regardless, something caused May sales tax totals to be basically flat in Lawrence.

Lawrence City Hall officials recently received their July sales tax check, but because of delays in the sales tax process, the check represents taxes that largely were collected in May. Lawrence sales tax collections grew by only 0.1 percent compared with the same period a year ago. The numbers continued a trend that has developed this year: Local sales tax numbers have struggled to gain any momentum, and often have lagged behind other communities.

Although Lawrence sales for the month were basically stagnant, many area communities saw their sales tax collections take off with the unofficial start of the summer season. For example, Manhattan saw its sales tax increase by 7.7 percent from the same month a year ago. Topeka was up 8.7 percent, Overland Park 9.1 percent and Olathe up 6.6 percent. In fact, of the major retail communities in the state that we track, Lawrence was the only one that didn’t see a big jump for the month. The next lowest was Salina, which saw a 5.6 percent increase.

One-month sales tax totals, however, tend to be volatile, and it is easy to give them too much significance. Lawrence’s year-to-date totals look better but also show some signs of weakness.

With Lawrence having received seven of its 12 sales tax checks this year, collections are up by 1.3 percent for the year, compared with the same period a year ago. Although it is positive that Lawrence’s sales tax collections are still growing, they’re doing so at a significantly slower growth rate than in past years. In fact, Lawrence is on pace to have its slowest sales tax year in at least the last five years. Here’s a look at past growth rates:

• 2017: up 2.2 percent

• 2016: up 5.5 percent

• 2015: up 4.7 percent

• 2014: up 4.1 percent

• 2013: up 2.1 percent

In past years, Lawrence’s sales tax growth rate had been one of the largest in the state when compared with other major retail markets in Kansas. As we have been reporting most of this year, that has changed in 2018. Here’s a look at where Lawrence’s year-to-date performance ranks, compared with other major metro areas in the state.

• Lenexa: up 20.8 percent

• Overland Park: up 8 percent

• Kansas City, Kan.: up 7.4 percent

• Olathe: up 4.1 percent

• Shawnee: up 3 percent

• Topeka: up 2.7 percent

• Sedgwick County (Wichita): up 2.6 percent

• Salina: up 2.2 percent

• Lawrence: up 1.3 percent

• Riley County (Manhattan): up 0.9 percent

The rest of the year will be interesting to watch. City Hall officials projected sales tax collections would increase by 2.3 percent in 2018. Consumers will have to pick up the pace quite a bit in the remaining months of 2018 to meet that projection.

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