photo by: AdobeStock

Gasoline pumps are shown in the AdobeStock photo.

Maybe Lawrence has been the canary in the coal mine.

For much of 2026, we’ve been reporting how Lawrence has been the unfortunate exception to the rule. While the state’s large retail markets were posting gains in the amount of sales taxes they were collecting, Lawrence was not. When we reported on the statistics last month, Lawrence was the only major retail market in the state that had seen its sales tax collections decline for the year.

No longer. The state has released its July sales tax report, and it gives rise to the question of whether Lawrence was simply a leading indicator rather than a true exception. In this most recent report, Topeka’s sales tax collections have now dipped into negative territory for the year. Plus, Lenexa, Olathe and Kansas City, Kan. each had one-month collections that were worse than Lawrence’s.

None of that is to say, though, that our canary got healthier. The July report showed Lawrence’s sales tax collections for the one-month period fell 5% compared to the same period a year ago. That was worse than the statewide average of a 3.1% decline.

In other words, Lawrence’s retail sales market is still a sickly bird.

Here’s an educated guess on what ailed Lawrence and several other markets during this most recent reporting period: A bad case of gas. No, I’m not talking about the type of gas found when you descend deep into a mine, nor even the type when you dive deep into a burrito.

Instead, I’m talking about the type of gas that comes from a convenience store pump and produces a very inconvenient pain in your wallet. The July reporting period for sales taxes actually captures sales made not in July but rather from about mid-May tp mid-June.

That mid-May period is about when gasoline prices were hitting their peak after hostilities erupted between the U.S. and Iran. The early to mid-June period is when many consumers were starting to realize high gasoline prices were going to stick around for awhile. This July sales tax report might be a sign that consumers started cutting their spending back elsewhere.

But, if people were spending more on gasoline, wouldn’t that cause the sales tax collections to go up too? No. The state and local governments don’t charge a sales tax on gasoline sales. Instead, an excise tax is charged. Those taxes show up in a different report, thus the sales tax report provides a good look at spending levels not including gasoline.

Is it certain that gasoline prices are what caused retail sales tax collections to take a dive? No. Again, I would label it no more than an educated guess. Plus, it is important to note that not all communities saw a decline. But, of the 11 major retail communities we track, eight of them saw a decline for the one-month period. Here’s a look:

• Manhattan: up 3.8%

• Salina: up 3.6%

• Merriam: up 0.5%

• Overland Park: down 1.2%

• Topeka: down 2.0%

• Sedgwick County: down 2.4%

• Shawnee: down 3.2%

• Lawrence: down 5.0%

• Kansas City: down 5.0%

• Olathe: down 5.8%

• Lenexa: down 7.1%

While Lawrence didn’t find itself at the bottom of the list, which has been its spot in many recent months, you can argue this latest report actually produced worse news for the city than some past ones. As we have been reporting, Lawrence’s poor performance in retail sales tax collections has been partially offset by a really strong performance when it comes to the type of tax charged for online purchases.

Lawrence has been growing its collection of use taxes — a type of special sales tax charged on many online purchases — at a rate faster than any other major retail market in the state. That was not true for the July reporting period, though. Lawrence’s citywide use tax collections for the one-month period declined by about 3% compared to the same period a year ago.

For the year, Lawrence’s citywide use tax collections are still up by nearly 15%, and they are helping offset the decline Lawrence is seeing in sales tax collections at traditional brick-and-mortar retail establishments.

But if the July report is the beginning of a new trend for online sales, that could make the second half of the year perilous for City Hall budget-makers. The category of sales and use taxes is one of the largest revenue streams for the city’s general operations. If both sales and use taxes begin falling, it will increase the likelihood that City Hall will have a budget shortfall this year.

Half of that fear is already occurring. Sales tax collections year-to-date are lower than they were during the same period a year ago, and are among the worst-performing of any major retail market in the state. Here’s a look at those year-to-date sales tax numbers:

• Manhattan: up 5.6%

• Kansas City: up 5.0%

• Lenexa: up 4.9%

• Sedgwick County: up 4.2%

• Shawnee: up 3.2%

• Salina: up 3.1%

• Overland Park: up 3.1%

• Olathe: up 1.8%

• Merriam: up 1.4%

• Topeka: down 0.3%

• Lawrence: down 1.4%

Next month’s report will be an important one in determining whether Lawrence might see a turnaround. The August report — which tracks sales from roughly mid- June to mid-July will be the one that largely captures any increase in spending the city saw from World Cup activity.