Before COVID-19, things were looking up in the Lawrence economy, new numbers suggest
photo by: Jackson Barton/Journal-World File Photo
We all probably will have plenty of feelings about 2020, although I likely won’t be able to quote many of them in a family-friendly newspaper. It may be worth remembering, though, that at the beginning of the year we seemed optimistic. At least the latest sales tax numbers from the state suggest Lawrence shoppers were in a spending mood.
The state has released its March sales tax report, and it generally was a positive one for Lawrence. No, the report doesn’t capture the COVID-19 craziness that began hitting the community in mid- to late March. Because of normal delays in reporting, the March sales tax numbers generally show sales that happened in January.
During those January days, Lawrence’s sales tax collections were up 4.7% from the same month a year ago. The special sales tax, called a use tax, that is charged when Lawrence residents make online purchases was up even more. It posted an 11.7% increase from the same month a year ago.
Of the three sales tax reports Lawrence has received in 2020, the March one was the best. Lawrence’s January report — reflecting sales made in November — was a bit of a stinker, posting a decline of more than 3%. Lawrence has been trying to claw its way back into positive territory ever since. Following the March report, Lawrence had done so. Its year-to-date sales tax collections were 1.1% higher than the same period a year ago.
Here’s a look at how Lawrence’s year-to-date totals compare with some of the other large retail centers in the state.
• Salina: up 3.5%
• Sedgwick County: up 3.3%
• Topeka: up 2.5%
• Kansas City: up 2.5%
• Olathe: up 1.8%
• Shawnee: up 1.7%
• Lawrence: up 1.1%
• Manhattan: down 0.1%
• Lenexa: down 2.2%
• Overland Park: down 2.6%
• Statewide: up 1.4%
These numbers show Lawrence being on the right side of the ledger, but they are also a bit of a mixed bag. The March report shows lots of communities in the state had a good month of sales tax collections. When we put together this list from the February report, six of the 10 communities were in negative territory for the year. One month later, seven of the 10 communities have posted gains for the year. Lawrence’s 4.7% increase for the month was better than the statewide average of 4.5%, but it was less of an increase than several of the other large retail centers on this list. Sedgwick County, home to Wichita, was up more than 8%, Olathe was up more than 9%, and Kansas City was up more than 13%, for example.
Still, Lawrence’s 4.7% increase for the month would be considered good news in ordinary times, and would lead to talk that Lawrence has a good chance of posting a good year of sales tax growth. But, of course, we know there is bad news ahead. The question is how bad?
The sales tax numbers probably won’t start showing the financial impact of the stay-at-home order until May. That’s when March numbers will start showing up. June’s numbers also probably will look pretty bad. Those numbers will start showing up at about the same time the City of Lawrence and Douglas County are putting together their budgets for 2020.
Government leaders, though, surely are not waiting until then to start thinking about what may need to change in terms of their planned spending. One of the bigger issues is at the Douglas County Courthouse. Will this COVID-19 disruption cause the county to delay its plans for a jail expansion? As currently proposed, the jail would be financed with bonds that are backed largely by sales tax collections. What type of stress testing is happening on that project, meaning how much of a drop in sales tax collections can the county sustain and still have enough funds to make bond payments on a jail expansion?
We will be checking in on those types of issues and others as we try to cover the financial implications of the pandemic.