photo by: Adobe Stock

A sales receipt is shown in this file photo.

By one measure, Lawrence’s economy is off to a strong start in 2025. Sales tax collections are growing at a rate well above the statewide average, and the city is posting some of the largest increases of any major retail market in the state.

Why? Cupid’s arrow, perhaps. That’s as good as any other explanation I could give you. Lawrence has received its sales tax checks from the state for January, February and March, but it was the February check that was outstanding. Sales tax collections during that reporting period were up 18.2% from the same time a year ago.

So, perhaps the check was delivered by magical arrow. Other explanations aren’t handy. The February check represented sales largely made in January and late December. It seems unlikely that Super Bowl partying added that much to the Lawrence economy, and I don’t remember KU basketball watch parties being spectacular either.

I never put much stock in one month’s worth of sales tax totals because they can be highly variable. Sometimes the reason for a big increase or decline are related to technicalities, such as a batch of reports didn’t get processed timely and didn’t make the cutoff for one month’s report but get added to a following month’s report. Or maybe a business — a manufacturer or such — made a really large purchase that caused it to pay a large sales tax bill for the month. In the case of February, the numbers suggest there was an increase of about $30 million in taxable purchases that occurred in the Lawrence city limits to start 2025, compared to the start of 2024.

That’s a mighty big copy machine for the office. Again, I don’t have an explanation. Regardless, the big month is having real impacts on Lawrence’s year-to-date numbers, which are the ones worth following.

With a quarter of the year in the books, Lawrence’s sales tax collections are up 7.2% compared to the first quarter of 2024. That’s compared to the statewide average of 4.3% growth. Lawrence’s sales tax growth thus far in 2025 is the second highest among the major retail markets that we track. Here’s a look at those numbers:

• Merriam: up 9.4%

• Lawrence: up 7.2%

• Manhattan: up 5.9%

• Topeka: up 3.8%

• Salina: up 3.4%

• Sedgwick County: up 3.4%

• Shawnee: up 1.3%

• Olathe: up 0.7%

• Kansas City: up 0.4%

• Lenexa: down 2.5%

The numbers are a welcome change from 2024. Lawrence posted growth of about 1% in sales tax collections last year, which was well below what City Hall budget-makers had expected. In case you have forgotten, the city’s budget is one of the reasons we pay attention to sales tax collections. Sales taxes are the largest source of revenue for the fund that provides for the city’s general operations. If sales taxes come in weak, the pressure usually grows for a property tax increase.

But, if Lawrence keeps up its current pace, the city will meet its budget in 2025 and then some. The city crafted the 2025 budget with an expectation that sales taxes will grow by 3.2% from 2024 totals. The city, however, crafted that budget in the middle of 2024, without knowing that 2024 sales tax collections would come in less than expected. Since the 2024 sales tax collections didn’t come in as high as expected, that impacts how much the city’s sales taxes need to grow in order to meet the 2025 budget number. Long story short, the city needs sales taxes to grow by a little more than 5% to stay on budget for 2025.

At 7.2% for the first quarter, so far so good.

Seemingly, though, there must always be a little bit of bitter with the sweet. In this case, that would be the March numbers. The city’s sales tax collections in March actually fell by 0.7% from the same period a year ago. That’s compared to 4.9% growth statewide. The 0.7% decline was the worst showing among the retail markets we track. Again, statistics from a single month should be taken with a grain of salt. But still, it will be worth keeping an eye on what’s to come because 2025 thus far has been strong, but also erratic.

Here’s a look at year-to-date totals for a some area communities:

• De Soto: up 29.4%

• Perry: up 19.7%

• Lecompton: up 12.8%

• Basehor: up 10.9%

• Overbrook: up 10.3:

• Spring Hill: up 8.4%

• Franklin County: up 7.2%

• Gardner: up 4.7%

• Bonner Springs: up 4.1%

• Baldwin City: up 3.9%

• Jefferson County: up 0.7%

• Tonganoxie: down 0.2%

• Eudora: down 1.2%

• Wellsville: down 3.3%

• Leavenworth: down 4.2%