Latest sales tax numbers show Lawrence economy takes another dip

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.

After posting surprisingly good numbers in June, Lawrence’s economy had no such luck in July, according to new sales tax data released by the state. Amid pandemic-related shutdowns and restrictions, Lawrence posted one of the larger sales tax declines of any major retail area in the state.

Lawrence’s sales tax collections fell by 12.4% from the same period a year ago, according to new figures from the Kansas Department of Revenue. The figures are from the department’s September report, but because of normal delays in reporting, the figures represent sales made primarily in July.

That 12.4% decline was in contrast to what happened in June. As we reported, the state’s numbers showed sales in Lawrence actually were up slightly in June 2020 versus June 2019. That seemed odd, given the number of businesses affected by the pandemic. But maybe there was some pent up demand in June as local residents had greatly cut back their activity in April and May.

Any such demand evaporated in July. The 12% decline was in line with the drops the economy experienced in April and May, when the pandemic was in its early stages. April’s numbers were down by 13%, and May’s numbers were off by 9.4%.

It also is interesting to look at how Lawrence is performing compared with the rest of the state. Statewide, communities saw July numbers drop by an average of 8.9%. So, Lawrence was worse than that average, but many of the state’s largest retail centers came in below that mark, too. In general, though, Lawrence fairly consistently has seen softer numbers than other cities. For instance, last month when Lawrence posted an increase in sales, its increase was smaller than in many of the other large cities. Here’s a look at how Lawrence’s July collections stacked up compared with the other major retail cities in the state.

• Topeka: up 3.8%

• Manhattan: down 8.4%

• Shawnee: down 8.8%

• Sedgwick County: down 11.5%

• Kansas City: down 11.6%

• Lenexa: down 11.7%

• Olathe: down 11.9%

• Lawrence: down 12.4%

• Salina: down 16.9%

• Overland Park: down 17.3%

Lawrence’s soft numbers are a bit more pronounced when you look at year-to-date results. This chart shows results from the January report through the September report, compared with the same period a year ago.

• Lenexa: up 2.2%

• Topeka: up 0.5%

• Sedgwick County: up 0.4%

• Olathe: down 0.3%

• Salina: down 0.3%

• Shawnee: down 0.9%

• Manhattan: down 3.1%

• Kansas City: down 3.6%

• Lawrence: down 4.1%

• Overland Park: down 7.8%

Lawrence has consistently posted positive numbers in one area that helps take some of the sting out of the declining retail sales figures. Use tax collections are up. That’s a type of sales tax that is primarily collected as part of purchases made from online retailers that are based outside the community. In July, those collections were up by about $30,000 or 12%. For the year, they are up about $170,000 or 7%. That $170,000, however, isn’t enough to make up for the lost retail sales taxes. For example, Lawrence’s general sales tax collections are down by about $780,000 in 2020 thus far. When the city’s share of the countywide sales tax is factored into the mix, the losses are even greater.

While rising online sales are helpful to the city’s budget in the short term, they may not be helpful to the city’s economy for the long term, if those sales end up coming at the expense of local retailers, who also pay property taxes and provide local jobs in the community.


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