One year after pandemic began, sales tax collections surge to new highs both in Lawrence and statewide

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While we haven’t yet been able to rip off those masks, there are new signs that Lawrence’s economy has become unshackled from pandemic-era restrictions. In fact, one set of numbers shows retail spending is now well above pre-pandemic levels.

The Kansas Department of Revenue has released its May report on sales tax activity across the state. While the report is labeled as being for May, most of the numbers actually represent sales made in March.

That makes it an especially interesting report. If you remember, March 2020 is when things became a little wobbly. (When your head starts spinning faster than the Earth, wobbliness is a side effect.) That was the first month the pandemic started having major economic impacts in Lawrence. So, that means this latest report from the state is the first time we can look at how Lawrence’s retail economy is doing today compared to how it was doing a year ago when we were mired in the pandemic.

It is no surprise that the sales tax numbers for March 2021 show a big increase compared to what was happening in March 2020. The Lawrence economy was way more open in March 2021 than in March 2020. The latest numbers show Lawrence’s sales tax collections for the month were up 22.7% compared to the same period a year ago.

But what is mildly surprising is that the numbers are up so much that sales tax collections are way above March 2019 totals. That means spending levels in Lawrence — at least for this one month — not only bounced all the way back, but grew significantly from where they were prior to the pandemic. Looking at the current report compared to the 2019 report from the same period, Lawrence sales tax collections are up almost 14% from 2019 levels. That’s far more than a bounce back.

Lawrence wasn’t alone in seeing the surge. Every one of the 10 large retail communities I monitor saw a big jump for the month. Here’s a look at the one-month numbers compared to the March 2020 time period.

• Manhattan: up 33.8%

• Salina: up 33.6%

• Kansas City: up 29.0%

• Topeka: up 28.5%

• Olathe: up 25.6%

• Sedgwick County: up 23.8%

• Overland Park: up 23.6%

• Lawrence: up 22.7%

• Shawnee: up 22.1%

• Lenexa: up 16.4%

• Statewide: up 24.3%

The numbers show Lawrence isn’t a leader in the recovery, by any means, but it is in the right ballpark. Its rate of growth was about 1.5 percentage points below the statewide average. That’s a better performance than what Lawrence has been posting recently. For instance, the previous month’s report — it lists sales activity primarily for February 2021 — showed Lawrence underperformed the statewide average by almost 3.5 percentage points.

Perhaps March is when Lawrence residents started feeling better about spending their federal stimulus checks. It would sure seem the federal checks to households are playing a role in spending levels soaring above pre-pandemic levels. How big of a boost each community got is not quite equal. Here’s a look at how the most recent sales tax collections compare to the same one-month time period in 2019, meaning before the pandemic struck.

• Lenexa: up 69.8%

• Salina: up 20.1%

• Topeka: up 14.7%

• Olathe: up 14.1%

• Lawrence: up 13.9%

• Manhattan: up 13.7%

• Kansas City: up 13.4%

• Shawnee: up 10.1%

• Overland Park: up 5.1%

• Statewide: up 14.8%

Lawrence is pretty close to the statewide average on that metric. (Feel free to ignore Lenexa, by the way. Its 2019 sales tax numbers were artificially low, I think because of some construction issues in one of its prime commercial areas.)

These numbers will be interesting to watch the rest of the year. There already is some national attention about how state and local governments are getting far more revenue than was expected as part of the recovery. The New York Times on Tuesday had an article about how there is pressure for the Biden administration to pull back some of the funding approved for state and local governments, and instead transfer that money over to a national infrastructure plan. Cities like Lawrence are scheduled to get about half of their allotment from the federal government this year and the other half next year. We’ve reported Lawrence is expected to receive about $19 million of federal aid over the two-year period.

Not everything is coming up roses for Lawrence, however. For whatever reason, Lawrence’s rebound began later than those of many other communities. This latest report was the fifth sales tax report of the year. The previous four had not been particularly kind to Lawrence. Until this latest report, Lawrence’s sales tax collections were in negative territory for the year. The latest surge pushed Lawrence into positive territory for the year, but it still is far below the statewide average growth rate and below that of many of the other large communities. Here’s a look at the year-to-date numbers compared to a year ago.

• Salina: up 9.3%

• Lenexa: up 7.7%

• Shawnee: up 7.3%

• Manhattan: up 7.1%

• Kansas City: up 6.9%

• Topeka: up 6.3%

• Sedgwick County: up 4.7%

• Olathe: up 4%

• Overland Park: up 3.5%

• Lawrence: up 1.8%

• Statewide: up 6.9%

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