With half a year on the books, Lawrence’s retail scene showing signs of cool down
photo by: John English/Special to the Journal-World
I just got back from a foreign vacation, so my dollar sense is a little rusty. (So is my peso sense. Come to find out, 7,500 pesos won’t rent you a yacht but will get you seasick in a kayak.) Regardless, I am able to ascertain that the latest sales tax numbers from the city of Lawrence aren’t much good for the stomach either.
The city has received six of its 12 sales tax payments for 2018. The year-to-date numbers show a couple of things. One, the Lawrence economy had a roller-coaster feel to it during the first half of the year — one month up, the next month down. Two, the second half of the year needs to be a bit stronger if the city wants to avoid a budget shortfall in its key sales tax fund.
The city’s June sales tax collections — which, because of delays in reporting, represent sales made in April — were down by 1.8 percent compared with the same period a year ago. For the entire year, though, Lawrence’s sales tax collections are still up by about 1.5 percent from the same period in 2017.
That is good news but perhaps not good enough. The city budgeted for a slightly larger increase. Looking at just city sales and use-tax numbers, the city has collected about $300,000 less than budgeted during the first half of the year. (The city also gets a share of the county’s sales and use taxes. Those numbers aren’t included here, but the trend is similar.)
While $300,000 is nothing to sneer at (my heavens, it is 5.7 million pesos, or one kayak with a paddle) that represents only about a 1 percent shortfall from the budget. So, it is nothing that the city can’t adjust to. However, the shortfall is significant because it is a reversal of a trend. The past several years, sales tax collections have been coming in above budget projections, giving the city a boost to cover increased spending or shortfalls in other areas. Unless something changes soon, the city won’t be able to count on that this year.
More broadly, the sales tax numbers also show that Lawrence’s retail economy has slowed compared with several others in the state. For the past several years, Lawrence’s sales tax growth was among the highest of any major retail market in the state. Now, Lawrence is showing up near the bottom of the list.
• Lenexa: up 18.7 percent
• Overland Park: up 7.8 percent
• Kansas City, Kan.: up 5.6 percent
• Olathe: up 3.6 percent
• Shawnee: up 2.4 percent
• Topeka: up 1.7 percent
• Sedgwick County (Wichita): up 1.7 percent
• Salina up: 1.6 percent
• Lawrence: up 1.5 percent
• Riley County (Manhattan): 0.3 percent
It is hard to say why Lawrence’s sales tax growth has slowed. The community the past couple of years did benefit from large new retailers coming into the community. Think Dick’s Sporting Goods and Menards, for example. Those retailers, it appeared, helped keep some shopping dollars in town, which benefited sales tax collections. Those stores are still keeping dollars in town, but they no longer represent new dollars in the community, and thus they aren’t creating a spike in the growth rate.
That may have something to do with Lawrence’s numbers, but other factors also may be at play. It is a trend worth watching.