photo by: Adobe Stock

The good news is that a lack of home football games for the University of Kansas hasn’t yet produced a major dent in Lawrence sales tax collections this year. The bad news (well, at least part of it) is that the City of Lawrence is still an underdog to meet its budget projections for sales taxes, which is the city’s largest source of revenue.

Kansas revenue officials recently released the state’s October sales tax report, which primarily tallies sales that are made in September. This was the report that some feared might show a big drop in Lawrence sales tax collections. September is the start of football season, but KU is not playing any of its home games in Lawrence this year due to construction work that is underway at the stadium.

A big drop in collections did not come. Instead, Lawrence posted a slightly above-average drop. Sales tax collections for the month were down 1.1% compared with a year ago. That was worse than the statewide increase of 0.9%, but Lawrence did fare better than many of the other major retail centers in the state.

The report provides no clues why the loss of the football games and the tens of thousands of money-spending fans didn’t produce more of a dent in Lawrence’s sales tax collections. Monthly sales tax collections — much like a football season — are fickle and sometimes require you to bury your head in a cauldron of nacho cheese dip. (Actually, maybe it is only football that causes the latter.) While the October report primarily catches September sales, that is more of a loose rule than a hard one. It is possible that there are still some reporting delays at play here, and a big drop might show up in next month’s numbers. It also is possible, though, that Lawrence has seen enough of an increase in other types of sales to largely offset the loss of football revenue.

Either way, here’s a look at the monthly totals for the state’s major retail centers:

• Topeka: up 1.6%

• Olathe: up 1.3%

• Shawnee: down 0.5%

• Lawrence: down 1.1%

• Sedgwick County: down 1.4%

• Merriam: down 2.1%

• Salina: down 2.4%

• Kansas City: down 9.8%

• Lenexa: down 11.8%

• Statewide: up 0.9%

While Lawrence was on the negative side of the coin, so too were most of the state’s retail centers. Statewide the numbers were up, which means the smaller communities performed better than the larger communities for the period. That happens more often than you would think.

The more important numbers are the year-to-date totals. Lawrence is also a bit below average in this ranking, and if it wants to meet its 2024 budget, it has work to do in the last two months of the year.

• Shawnee: up 2.6%

• Olathe: up 2.1%

• Kansas City: up 1.7%

• Topeka: up 1.5%

• Lawrence: up 1.3%

• Merriam: up 0.6%

• Salina: down 0.4%

• Sedgwick County: down 0.6%

• Lenexa: down 0.9%

• Statewide: up 1.7%

The key number to keep in mind is 2.7%. Lawrence’s revised 2024 budget calls for sales tax collections in 2024 to grow by 2.7% versus 2023 totals. They are at 1.3% for the year thus far. So, Lawrence is still within striking distance of meeting its goal, but it might be a good idea to run the no-huddle offense as time ticks away. In other words, shoppers will need to be robust in November and December.

Disaster will not strike the city’s budget if it fails to hit the 2.7% mark. The city already has made some adjustments to its budget to account for lower revenues. A further miss most likely will mean that the city holds off on some expenses until the new year, or it starts the new year with a bit less in cash reserves than what it intended.

But Lawrence residents probably should root for a strong finish regardless. The bigger-picture issue is that Lawrence experiences another below-average year for sales tax collections which cause city officials to become more wary of that revenue source’s reliability. City Hall budget-makers have been counting on average increases of 5% per year in sales tax collections. It seems very unlikely that activity will pick up enough in the next two months for Lawrence to approach that number.

That means Lawrence is set to have its second consecutive year of sales tax collections of less than 5%. Last year sales tax collections grew by 3.9%. Lawrence likely won’t hit that total either, marking the third consecutive year that Lawrence’s growth rate has been slower than what was posted the year before. The reaction at Lawrence City Hall will be for budget-makers to lower their expectations for sales tax collections. As they lower those expectations, they are likely to seek higher property tax rates to make up the difference. That was the story of the proposed 2025 budget this summer, which proposed a property tax rate increase, but ultimately was rejected by city commissioners.

So, in other words, Lawrence taxpayers have a reason to watch this game to its end.

•••

Lawrence does have a new sales tax generator in town: Whataburger. The fast food chain opened its first Lawrence restaurant on Monday morning. Other such openings of the Texas-based chain in the Kansas City area had caused long lines to the point of traffic disruptions.

Some of you have been wondering if such a scene developed in Lawrence on Monday. The short answer: No.

I did my duty as a reporter and watched the situation (sometimes peering from behind a hamburger and other times looking through a handful of fries.) At about 10:20 a.m. there were no massive lines, and nothing approaching an overflow onto 23rd Street, which locals have expressed worries about. There were about five people in line to enter the lobby, with the first one to enter receiving a yearlong prize of Whataburger food. If you are scoring at home, Lawrence resident Logan Daniels took that spot by arriving at 4 a.m. on Monday, he told me. By 11 a.m. the crowd had increased but there were still open spots in the parking lot.

photo by: Chad Lawhorn/Journal-World

A small line of people waited outside the lobby of Whataburger on its opening day on Monday, Oct. 29, 2024.