photo by: Shutterstock Photos

There are now signs that the economic recovery in Lawrence and Douglas County has a roar to it, at least when it comes to retail spending.

The state released its latest sales tax numbers — which cover sales made largely in April — and they show Lawrence cash registers were ringing during the month. Local sales tax collections were up 33% compared to the same time period a year ago.

Of course, April 2020 was an awful time period for local businesses. The pandemic was here in full force, and students never came back from spring break. So it is no surprise that sales tax numbers have surged from that low point.

But what is worth noting is that Lawrence is now experiencing a recovery that is a bit more robust than other parts of the state. That is a new development. These latest monthly numbers are the first where I have been able to say that Lawrence outperformed the state as a whole. Lawrence’s 33% increase was far better than the 23.5% increase the state as a whole experienced during the one-month period. The list below shows you how well Lawrence fared compared to other major retail cities in the state.

Manhattan: up 36.2%

Kansas City: up 38.9%

Overland Park: up 35.2%

Lawrence: up 33.7%

Salina:up 26.9%

Olathe: up 25.6%

Topeka: up 22.7%

Sedgwick County: up 21.5%

Shawnee: up 18.9%

Lenexa: up 14.7%

Statewide: up 23.5%

But Lawrence really does have a bit of a hole to dig itself out of. As I’ve been reporting for months, the recovery seemed to get started more slowly in Lawrence than elsewhere. While Lawrence now may be making up ground, the year-to-date numbers show Lawrence is still last in terms of how much sales tax revenues have bounced back overall. Here’s a look at the year-to-date numbers:

Salina: up 12.0%

Kansas City: up 11.5%

Manhattan: up 11.3%

Shawnee: up 9.2%

Topeka: up 8.9%

Lenexa: up 8.9%

Overland Park: up 8.0%

Olathe: up 7.7%

Sedgwick County: up 7.4%

Lawrence: up 6.4%

Statewide: up 9.6%

This month’s report is one of the more interesting sales tax reports to watch because it comes in the middle of budget season for governments like Douglas County and the City of Lawrence. It also is easy to interpret because it is the sixth of 12 monthly reports we will get this year. (This is the June report but because of normal lag times in reporting, the figures in the June report mainly represent sales made in April.)

In other words, we have half of the year in the books, and it is pretty easy to look at the trend and compare that to the projections budget officials are making at City Hall and the County Courthouse.

The city hasn’t yet released its recommended budget, but Douglas County has, and I’ve been covering the county’s budget hearings all week. Douglas County is projecting to finish the year with $7.4 million in sales tax collections for its general fund. That’s roughly the same amount the county collected in 2020. But the latest numbers from the state show that Douglas County sales tax collections are on pace to be 7.9% higher than they were in 2020.

If that projection holds true, the county’s general fund actually will collect a little more than $8 million in sales tax revenue, or about $600,000 more than what the county is expecting to collect. That could be useful money as the county is trying to decide whether to raise property tax rates for the 2022 budget. Of course, there is no guarantee that the current trend will continue and Douglas County will finish the year 7.9% ahead of 2020 totals. But there is a decent likelihood of it.

That’s the type of bet that government officials have to weigh this time of year. Most of the time, government officials aren’t willing to make that bet. In other words, when faced with the prospect of raising the property tax rate versus betting on an established but uncertain trend of extra sales tax revenues, most of the time government officials will raise the property tax rate. It is just a more sure thing.

But indeed, there have been years when they have raised the property tax rate and the extra sales tax revenues also have materialized. In those cases, the government gets a bit of a windfall. That unexpected money often ends up in the version of a savings account or spent on some one-time projects. The number of times it gets set aside to lower a future property tax rate isn’t very often.

But it appears the county is in a position to again consider that scenario, and when we get the City of Lawrence’s budget numbers next week, they may show the city is facing the same situation. It seems possible both entities will get more sales tax revenue than they expected to receive in 2021. But again, history suggests they won’t be comfortable enough to pass along some of that unexpected revenue in the form of lower property tax rates.