New report provides glimpse of how much money KU basketball tourney success pumped into local economy

Crimson and blue body paint isn’t cheap. (Well, you can buy cheap body paint, but it doesn’t pencil out after you pay the sandblaster to get it off.) The point being, celebrating KU basketball and March Madness involves spending some money, and the latest report shows the city of Lawrence’s tax coffers once again reaped the rewards.

The city of Lawrence recently received its May sales tax check from the state of Kansas. Due to lag times in reporting, that May check represented lots of sales that happened in March. That, of course, is the magical month where in Lawrence college basketball tournaments have a slightly stronger pull than gravity.

The latest state report suggests that KU’s run to the Final Four caused spending levels to soar even more. (How could they not? My household actually bought a name-brand brownie mix to take to a party. That’s not cheap.) The report shows that sales tax collections in Lawrence increased by 7.4 percent compared with the same month in 2017. That equates to about an extra $10 million in sales — generating about $150,000 in extra taxes — that happened in the Lawrence economy during the one-month period.

Keep in mind that none of this is exact. There is no way of knowing how much KU’s basketball success pumped into the Lawrence economy, and due to some of the lag times in sales tax reporting, it is hard to use the reports to match up sales totals to specific events. But clearly it had some impact. Just think how much more spending there would have been if KU had made it to the championship game. (We probably would have bought the eggs and other ingredients to actually make the brownie mix for that party.)

Even without that championship boost, the coffers at City Hall are still grateful. Lawrence’s sales tax collections needed a boost. Prior to the city receiving its May sales tax check, sales tax collections were up by less than 1 percent for the year to date. Following the May check, Lawrence sales tax collections are up 2.2 percent for the year to date.

That showing gives Lawrence a better chance of meeting its budget projections for 2018. But there is still some reason for concern on that front. Unlike the past few years, Lawrence’s sales tax growth is not outpacing that of other large retail communities. For whatever reason, Lawrence has been a bit of a laggard, except for this most recent month. What happens the rest of the year will be worth watching. The next sales tax report that comes out in late June may be particularly pivotal. That’s because City Hall leaders will be deep into crafting a recommended budget for 2019. If they believe sales tax revenues are tepid, that historically has resulted in upward pressure on property tax rates.

It will be interesting to see what City Hall leaders make of the current sales tax trend. Thus far in 2018, Lawrence hasn’t had two consecutive months of sales tax growth, but that also means it hasn’t had two consecutive months of sales tax declines. It has been a roller coaster, and the May report continued that trend.

Here’s a look at sales tax totals year to date for some of the larger retail markets in the state:

• Lenexa: up 17.2 percent

• Overland Park: up 5.5 percent

• Kansas City, Kan.: up 3.8 percent

• Olathe: up 3.8 percent

• Shawnee: up 2.6 percent

• Lawrence: up 2.2 percent

• Salina up: 1.9 percent

• Topeka: up 1.7 percent

• Sedgwick County (Wichita): up 1.4 percent

• Riley County (Manhattan): down less than 0.1 percent


As I mentioned last week, the Journal-World has teamed up with the University of Kansas School of Journalism on a research project. A team of professors and students at the journalism school received an Innovation in Journalism Education Grant from the Online News Association. The grant work will look at a variety of data issues, and part of the grant work is finding ways to reach out to the community about issues related to economic data.

To that end, the students and researchers have developed a survey that they hope readers of Town Talk will take. You can find the survey at this link.