Sales tax numbers have bounced back in Lawrence, but statewide they’ve taken a big downturn

Comebacks really are possible, which is why I refuse to throw away three-quarters of the clothes in my closet. First, the KU football team pulls off one on Saturday, and now it looks like local businesses are experiencing a bit of a bounce back too. After being down for much of 2019, local sales tax collections are making a comeback in the second half of the year.

The City of Lawrence recently received from the state its August sales tax check, and it is up 2.2% from the same period a year ago. That marks the the third straight month the city has seen its sales tax collections increase. This is the first time all year that Lawrence has been on a three-month winning streak.

The August check, because of lag times in reporting, represents sales mainly made in June. So, spending in the early summer seemed to increase in Lawrence. If the football team continues to attract larger crowds than it did last year, then fall numbers also may be in for a boost. Yes, there is this little matter of a trade war that might have something to say about future results.

The August uptick almost pulled Lawrence into positive territory for the year. Lawrence now has collected 0.3% less in sales tax revenues than the same period a year ago. In actual dollars that amounts to about a $53,000 shortfall. (That would seem to mean we are only one good tailgate party away from catching back up to last year’s totals.)

Whether Lawrence will make a full comeback and post a positive year of sales tax growth is kind of interesting to watch. (Well, I eat as much nacho cheese at that tailgate as I do the football ones, anyway.) Lawrence hasn’t seen a decline in sales tax collections since 2010, when we were still feeling impacts from the Great Recession.

We don’t get some type of trophy for keeping the streak alive, but the sales tax numbers are one of our better ways of measuring the health of the local economy. Last year we came really close to posting a decline with only a 0.8% increase in sales tax collections. That probably was due more to inflation than increased buying activity. That set this year up to be a telling one on whether we’ve entered a new downward cycle. Thus far, the answer is yes, but Lawrence consumers may still have something to say about that.

Or maybe not. The numbers from the August report are weird in one way. Lawrence was a complete outlier when compared with the other nine major retail cities that we track. It was the only city that posted positive sales tax growth for the month. Remember, these numbers largely represent sales made in June. The Lawrence area was damaged by a tornado in late May, which resulted in many people needing to buy materials, furnishings and other things to replace what they lost. Perhaps that played a role in Lawrence posting sales tax growth, while the month appeared to be a bear everywhere else. I’m not sure, but it does take a bit of shine off the latest results. Here’s a look at the one-month numbers.

• Lawrence: up 2.2%

• Lenexa: down 3.1%

• Topeka: down 3.4%

• Kansas City: down 3.8%

• Shawnee: down 4.3%

• Olathe: down 4.4%

• Sedgwick County (Wichita): down 5.2%

• Salina: down 6.1%

• Overland Park: down 8.1%

• Manhattan: down 9.1%

As for the numbers for the entire year, the August showing made things look a bit bleak. Last month we reported that three of our 10 cities had posted positive sales tax growth for the year. Now, only Shawnee has, and that is by the slimmest of margins. Its collections are up by less than one-tenth of a percent. Everyone else is in negative territory for the year. Here’s a look:

• Shawnee: 0.0%

• Sedgwick County (Wichita): down 0.1%

• Lawrence: down 0.3%

• Manhattan: down 0.3%

• Olathe: down 1.2%

• Kansas City: down 1.2%

• Salina: down 2.7%

• Topeka: down 3.7%

• Overland Park: down 5.5%

• Lenexa: down 13.4%


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