photo by: Adobe Stock

We’re entering the fourth quarter. The game is on the line. We now know what we need to gain to grasp victory.

One, long . . . percentage point. (No, not a yard. This is not football. Why do you have a mouthpiece in?) We are talking about Lawrence sales tax collections, and indeed we have entered the fourth quarter of the year. It also is true that there is a bit at stake for the city of Lawrence and its budget as we close out the year.

You may recall that sales tax issues put a lot of pressure on the city’s budget this year, as sales tax collections didn’t grow nearly as rapidly as the city had projected for 2024. While 2024 budget issues largely have been addressed, the city is counting on 2024 sales taxes to finish the year strong in order for the 2025 budget to start out on track. Sales tax collections are the city’s largest revenue source.

The latest report from the state of Kansas gives Lawrence more hope that it might meet its end-of-year goal. Lawrence sales tax collections in the September report were up 9.4% compared to the same period a year ago. That is one of the better monthly showings this year for Lawrence.

More importantly, the latest figures mean that Lawrence’s year-to-date sales tax collections are up 1.6% compared to the same period a year ago. Lawrence needs to finish the year with sales tax collections up 2.7% in order to start 2025 on track. So, Lawrence is within striking distance of that goal, thanks to the strong September report. Prior to this latest report, collections were up less than 1%.

There is still a real question, though, about what happens the rest of the year. This latest report, even though it is called the September report actually measured sales made in August. (It comes out in September, thus the name.) It is going to take some pretty big increases in the last three months to gain that 1% for the year. It is not clear that Lawrence is going to see any growth in sales taxes the last three months of the year, given that KU football is not playing any of its home games in Lawrence this year due to construction at the football stadium.

As a reminder, last year KU played seven home football games in Lawrence between September and the end of November. This year there will be none, as all home games are being played in Kansas City. The common thinking is the loss of those games, and the fans who come with them, will put a dent in Lawrence’s sales tax collections. But, sales tax collections are hard to predict. Maybe other events — or just more general spending by Lawrence residents — will make up for those losses.

As they say in a football game, it all depends on the spot. (Yeah, that doesn’t sound any smarter here than it does in a football game.) Regardless, the September numbers were good for Lawrence. Here’s a look at other major retail markets in the state, all of which also had a pretty good month.

• Kansas City: up 15.2%

• Merriam: up 12.7%

• Shawnee: up 11.5%

• Salina: up 11.3%

• Olathe: up 11.0%

• Lenexa: up 10.7%

• Topeka: up 10.5%

• Sedgwick County: up 9.7%

• Lawrence: up 9.4%

• Statewide: up 12.0%

While the month was solid for Lawrence, the chart does show the city underperformed the state as a whole and the other major retail markets we track. (Note: There are couple of large retail markets — Overland Park and Manhattan — that we don’t track this year because their sales tax rates changed, and thus year-to-year comparisons are more difficult.)

As for why retail sales tax collections went up so much for the month, the report doesn’t shed any light on that question. Monthly sales tax collections are volatile. The September report does include a lot of back-to-school shopping dollars, so it is possible back-to-school spending was up for some reason, but that is pure speculation.

The less volatile numbers are the year-to-date figures. Here’s a look at those numbers for the major retail markets that we track:

• Kansas City: up 3.0%

• Shawnee: up 2.9%

• Olathe: up 2.2%

• Lawrence: up 1.6%

• Topeka: up 1.4%

• Merriam: up 0.9%

• Lenexa: up 0.6%

• Salina: down 0.1%

• Sedgwick County: down 0.5%

• Statewide: up 1.8%

In that metric, Lawrence is basically at the state average.

Finally, here’s a look at some other area towns and how their sales tax collections are faring through the first three quarters of the year, compared to the same period a year ago:

• Basehor: up 9.6%

• De Soto: up 64%

• Eudora: down 1.1%

• Gardner: up 0.9%

• Leavenworth: down 2.6%

• Lecompton: up 33.2%

• Oskaloosa: up 4.0%

• Ottawa: up 4.7%

• Overbrook: down 8.7%

• Perry: up 11.4%

• Spring Hill: up 10.1%

• Tonganoxie: down 3.3%

• Wellsville: down 1.8%

I’ll pass along a couple of notes on those listings. First, Baldwin City is not included in the list because its sales tax rate has changed over the past year, thus impacting year-to-year comparisons.

Second, the 64% increase in De Soto is not an error. As you may recall, De Soto is home to the new $4 billion Panasonic electric vehicle battery plant that is under construction. Through the first nine months of the year, De Soto city government has collected about $640,000 in additional sales tax collections in the first nine months of the year.

That equates to about $36 million in additional sales of merchandise and such that has occurred in the De Soto city limits. Or, in other words, about $4 million in new sales per month. Obviously, the battery plant is having a significant impact on the De Soto economy even as it prepares to open early next year. But the numbers also show that the impact is not necessarily spreading. Eudora is the community closest to De Soto, and it has seen no bounce. It is down slightly.