While most communities saw a big economic bounce, Lawrence basically was flat, new numbers show
photo by: Jackson Barton/Journal-World File Photo
If you remember back in January, the big news was that every man, woman and child would soon be getting a $600 COVID-19 relief check from the federal government. Well, the checks certainly came, and in most Kansas communities, a big boost in spending followed. But that wasn’t the case in Lawrence.
The latest sales tax numbers from Kansas officials show that Lawrence’s business activity is off to the slowest start of any major retail center in the state. That’s been a trend for a couple of months now, but the state’s most recent report showed it more starkly.
The most recent report is the March report, but due to normal delays in reporting, those figures really represent sales that were made in January. During that one-month period, local sales tax collections across the state increased by about 12%. In Lawrence, however, sales tax collections were up just 0.9%.
When you look at the 10 cities that are big retail markets in the state, you see lots of double-digit growth totals. Here’s a look:
• Lenexa: up 34.8%
• Overland Park: up 16.0%
• Kansas City: up 14.2%
• Manhattan: up 11.1%
• Salina: up 10.6%
• Olathe: up 9.9%
• Shawnee: up 9.3%
• Sedgwick County: up 9.0%
• Topeka: up 8.9%
• Lawrence: up 0.9%
Why didn’t Lawrence see a bounce anywhere close to those numbers? The report just provides statistics, not definite answers. But clearly some people will speculate the numbers were impacted by tighter pandemic restrictions compared with other communities.
While I don’t have the information to do a side-by-side comparison of the restrictions in every community, media reports out of Johnson County do indicate that bars and restaurants in January 2021 were allowed to stay open later there than they were in Lawrence, and the Johnson County health order had more ability for officials to grant exceptions to gathering limits than the one in Douglas County.
Perhaps the biggest pandemic restriction in Lawrence, though, had to do with the University of Kansas. KU pushed the start of the spring semester into February, back from a traditional January start date. That decision certainly affected spending levels in Lawrence.
But Lawrence also has had lower incidence rates for COVID than many other communities in the state.
“I’m convinced that will pay dividends for us,” Bonnie Lowe, president and CEO of the Lawrence chamber of commerce, said of the community’s efforts to control COVID.
She’s also convinced that Lawrence’s economic numbers will see a bounce back, even if they are delayed a bit from some of the other communities. She said the retailers she’s talking to now seem genuinely optimistic about this spring; they’ve indicated that there are more signs of people buying things that they want rather than simply need. Consumers seem to be exiting the mindset of waiting to make some purchases.
“I think that optimism is going to help us going forward,” Lowe said. “We are a little impatient right now, but Lawrence will rise again.”
Indeed, Lawrence’s uptick may be coming, or it may have already occurred but not yet shown up in the numbers. The next state report in April will show totals from sales made largely in February.
However, the numbers we do have today show Lawrence has a bit of a hole to dig itself out of. The state has now released three monthly reports in 2021. Those year-to-date numbers show Lawrence’s sales tax collections are down 3.5% for the year. Statewide, local sales tax collections are up 3% for the same period.
Here’s a look at how Lawrence is performing year-to-date compared with other large retail centers in the state:
• Lenexa: up 7.7%
• Salina: up 4.2%
• Shawnee: up 3.4%
• Kansas City: up 2.8%
• Manhattan: up 1.8%
• Topeka: up 1.2%
• Overland Park: up 0.8%
• Sedgwick County: up 0.6%
• Olathe: down 3.0%
• Lawrence: down 3.5%
The downturn in sales tax revenues hasn’t produced a financial crisis at Lawrence City Hall. That’s partly because a different type of tax continues to soar. As we’ve reported for months now, Lawrence continues to see large increases in use tax collections. A use tax is a special type of sales tax that is charged on online purchases made from retailers outside the community. So, when you buy on Amazon, you are paying a use tax.
Lawrence has had one of the largest increases of use tax collections of any city in the state. The city’s general use tax collections are up 26% thus far in 2021, according to state statistics. Here’s a look at those numbers:
• Lenexa: up 32.8%
• Lawrence: up 26%
• Shawnee: up 23.4%
• Manhattan: up 15.9%
• Overland Park: up 13.0%
• Topeka: up 11.7%
• Salina: up 11.3%
• Sedgwick County: up 11.3%
• Kansas City: up 8.7%
Those soaring use tax numbers do create some concern for Lowe. She said it may be a sign of some “bad habits” developing among Lawrence shoppers as it relates to buying products from distant online retailers instead of local establishments.
“We just have to continue to point to the importance of buying things locally,” Lowe said. “We just want people to realize that you can get those same items in town — and a lot of times with curbside pickup or delivery.”