photo by: Adobe Stock

The halfway mark is in sight. What’s not is a realistic path for the city to meet one of its key budgetary goals.

The city of Lawrence this year budgeted for a 5% increase in sales tax revenues over 2023 totals, but through May it has seen revenues grow by less than half of 1%.

That said, Lawrence’s sales tax collections are doing better than many of the large retail markets in the state. Of the nine major retail markets we track, five of them have posted losses compared to the same period a year ago.

Compared to that, Lawrence’s year-to-date growth of 0.3% isn’t too bad. In fact, it is very much average. Local sales tax collections statewide are up 0.3% too, according to the latest report from the Kansas Department of Revenue.

The numbers are through May, the fifth of 12 sales tax checks the city will receive from the state this year. Here’s a look at year-to-date totals for major retail markets in the state, compared to the same period a year ago:

Kansas City: up 1.9%

Topeka: up 0.5%

Shawnee: up 0.5%

Lawrence: up 0.3%

Merriam: down 1.2%

Salina: down 1.6%

Olathe: up 1.8%

Sedgwick County: down 2.2%

Lenexa: down 2.8%

Statewide: down 0.3%

If you are keeping score at home, normally we would have Overland Park on the list, but that Johnson County city recently changed its sales tax rate, so meaningful comparisons between this year and last year aren’t readily available. Manhattan also is not on the list for that same reason.

The city of Lawrence builds a lot of its budgets — particularly its capital improvement plan that funds road and building improvements — on an assumption that Lawrence sales tax collections will grow by at least 5% per year for the foreseeable future.

If the trend in 2024 holds, this would be the second consecutive year that Lawrence has posted sales tax growth of less than 5%, and the third consecutive year that Lawrence has seen its sales tax growth rate decline. Lawrence’s city budget would have adequate reserves to meet any shortfall created by the lower than expected rate of sales tax growth this year. Eventually, though, Lawrence may have to rethink whether the 5% rate is the right one for future years. That type of discussion may occur at City Hall this summer, as commissioners will start work on crafting their budget for 2025 soon.

While the latest report is for May, due to normal delays in sales tax reporting, the dollars really represent sales primarily made through April. Some Aprils are fantastic for Lawrence, as shoppers are buying National Championship T-shirts and hangover cures as fast as both can be made. However, this April wasn’t a national championship one on or off the court. But, compared to other months in 2024, it was one of Lawrence’s better months.

Here’s a look at the sales tax collections for just the one-month period, compared to the same month a year ago.

• Kansas City: up 4.7%

• Lawrence: up 0.8%

• Olathe: up 0.4%

• Topeka: up 0.2%

• Merriam: down 0.2%

• Shawnee: down 1.5%

• Sedgwick County: down 3.2%

• Salina: down 3.3%

• Lenexa: down 5.5%

• Statewide: down 1.1%

I never make too much of one month’s worth of sales tax collections, but places such as Sedgwick County — which is primarily Wichita — Salina and Lenexa showed some significant softness in the month.

One market that is not seeing softness and likely won’t for quite some time is De Soto, which is home to the 4,000-job, $4 billion Panasonic electric vehicle battery plant that is set to open in early 2025. Construction work on the project is well underway, and so too are many projects in the De Soto community. Readers have expressed an interest in following along on how the local economy is impacted by the project, so I will try to report on De Soto’s total periodically.

In May, the report is simple: Collections were up, and up by a lot. For the one month period, sales tax collections were up 50%, meaning De Soto City Hall collected about $56,000 more in sales tax collections than it did during the same month in 2023. Year-to-date, collections are up by an even slightly larger margin. Collections are up 56%. The city has collected about $290,000 more in sales tax collections than it did a year ago.