Lawrence sales tax collections bounce back

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.

Maybe we all decided to buy our football tailgating supplies at the same time. (Is that why Taco Bell refused to fill my stock tank with nacho cheese sauce?) Or maybe there is some other explanation, but the start of fall ended up being the start of a new spending season in both Lawrence and across the state, according to the latest sales tax report.

Lawrence recently received its November sales tax check from the state of Kansas, but because of delays in reporting, the numbers actually represent sales made in or near September. The report shows sales tax collections grew by 6% compared with the same month a year ago. That’s a strong showing, but lots of other cities across the state did equally as well. The average increase for communities across the state was 6.8%, according to data from the state.

As is usually the case, I have no idea what drove the one-month increase. The previous month’s totals were down quite a bit both in Lawrence and across the state, so a bit of a bounce back isn’t unexpected. I generally don’t pay much attention to the one-month totals but rather look at the year-to-date figures.

The latest totals have Lawrence hovering right near the break-even point for the year. With just one more sales tax check to be received this year, Lawrence has sales tax revenues that are up 0.7% from the same period a year ago.

Lawrence has posted a year-over-year sales tax increase every year since 2010. That streak appears likely to continue. The city’s December sales tax check would have to be a pretty poor one for Lawrence to end the year in negative territory, but it is still possible.

What’s likely, though, is Lawrence’s growth rate for sales tax collections will be less impressive than in past years. In previous years growth rates of 4%, 5% or more have happened. It is looking like 2019 will end below 1%.

In some years Lawrence has posted the fastest growth rate of any major retail market in the state. This year, Lawrence ranks more in the middle of the pack. Here’s a look at the year-to-date growth rates of other major retail markets:

Year to date

Sedgwick County (Wichita): up 1.9%

Kansas City: up 1.7%

Shawnee: up 1.3%

Olathe: up 1.1%

Lawrence: up 0.7%

Salina: up 0.5%

Manhattan: down 0.3%

Overland Park: down 2.4%

Topeka: down 2.7%

Lenexa: down 6.3%

An area where Lawrence has excelled is in the collection of use taxes. That’s a type of sales tax that is charged on online purchases and other products that you buy elsewhere but have delivered to your home or business in Lawrence. As we’ve been reporting all year, Lawrence is seeing big growth in those tax collections.

With 11 months in the books, Lawrence’s use tax collections are up 19.5% The state system makes it difficult to compare Lawrence’s growth rate with every other community, but I did some computations to compare Lawrence with a couple of major cities. Topeka has seen a decline in use tax collections of about 3.7% while Overland park is up about 6.5%. Even Sedgwick County, which is having a better sales tax year than Lawrence, trails at 13.9% growth in use taxes.

Again, I don’t have any solid explanations on why use taxes are soaring so much in Lawrence, other than the obvious one that more people are buying more items online.

The tax numbers are important because sales taxes are a major revenue source for the city’s budget. This year some social service agencies also are watching closely. City officials previously said they wanted to wait until late in the year to see how sales tax collections come in before deciding whether to grant some social service funding requests to organizations like the Lawrence Community Shelter.

One more month to wait, on that front.


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