Lawrence sales tax collections weaken in November report, but still strong for the year

As the year draws to a close, we are getting a better sense of how much bounce this bounce-back year has had in Lawrence. The answer: Slightly less than average.

The city of Lawrence recently received its November sales tax check from the state, meaning it now has 11 of the 12 checks for the year in the books and in the bank. The November sales tax report mainly represents sales made in September, due to normal reporting delays.

The numbers show it was a bit of a sluggish September, both in Lawrence and across the state. Lawrence’s sales tax collections for the period were down 1.6% compared to the same period a year ago. Statewide, local sales tax collections were down 1.2%.

The one-month numbers, though, aren’t as important as the year-to-date numbers. With 11 months recorded, they provide a pretty good view of the year. For Lawrence, those year-to-date numbers show sales tax collections are up 6.9% compared to the same 11-month period a year ago.

So, definitely 2021 has been a bounce-back year from the pandemic slowdown of 2020. But, the bounce-back in Lawrence hasn’t quite been as strong as the state as a whole. Statewide, local sales tax collections are up by 8.5%.

But, hey, it is nothing to cry over. The 6.9% growth rate is fantastic compared to historical averages of 2% or 3%. The numbers are up everywhere, obviously, because they took such a big hit in 2020 when the pandemic produced a lot of bans on indoor dining and other commerce. More importantly, Lawrence’s sales tax collections continue to come in better than what the city expected when it crafted its 2021 budget. Last month, we reported sales taxes and use taxes were about $4 million larger than what the city had budgeted to collect. The city hasn’t yet calculated the figure for November, and I broke a string on my abacus, so I’m not going to try to calculate it this month. But, in general, the city is still millions of dollars ahead with just one month left to go.

We’ll do a full accounting in December to show how much more the city received in revenue than what it budgeted for. In other words, how big is the windfall, although you probably should put an asterisk next to that word. It is unlikely that any windfall is going to create conversation at City Hall about how to spend it. If you remember, the city passed a 2022 budget that is out of balance by about $8 million. The city is planning to use federal grants and its reserve funds to cover the shortfall. So, any windfall in 2021 is likely just going to be used to help cover the 2022 expenses that already are in the budget.

Regardless, we’ll get the year-end numbers just a little bit after Christmas. (I know, even more reason to be excited for the holidays.)

Until then, here’s a look at how Lawrence’s year-to-date sales tax rate stacks up with other large retail markets in the state:

• Lenexa: up 10.5%

• Kansas City: up 10.4%

• Manhattan: up 10.2%

• Overland Park: up 9.9%

• Salina: up 8.9%

• Sedgwick County: up 7.7%

• Lawrence: up 6.9%

• Shawnee: up 6.5%

• Olathe: up 6.3%

• Topeka: up 5.9%

I briefly mentioned use taxes earlier, and as you may recall, that is a special type of sales tax charged for online purchases that are delivered to your home. That sales tax you pay on Amazon or other such sites technically is a use tax.

And to use another technical term, it continues to go through the roof in Lawrence. With 11 months in the books, use tax collections in Lawrence are up 25%, or about $840,000 compared to the same period a year ago.

So, while we have picked up the pace of our in-person spending this year, we haven’t slowed down with the online spending, which hit new highs last year. I know those statistics ring true in my household.

Every month this year, the smart chip in my credit card has proven that it is way smarter than me.

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