Lawrence sales tax collections among the best in the state; city on pace to collect more than budgeted in 2017

Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

As the holiday shopping season begins and the year ends, the general rule in some households is to ignore all financial statements (and turn off all the lights and be very quiet if a man from the bank comes to the door.) But that shouldn’t be the case at Lawrence City Hall. With just one more month to go, a key city financial indicator — sales tax collections — looks pretty good.

The city recently got its November sales tax check from the state. It was 5 percent — or about $100,000 — larger than the November 2016 check. Even though the check is for November, the money represents sales that were made more in the September time period. So, thus far, the overall Lawrence economy made up for any downturn in KU football attendance, which theoretically should pump sales tax dollars into the city.

The more important numbers, though, are the year-to-date figures. Barring something dramatic with the December check, Lawrence once again will see its total sales tax collections grow — and by a pretty respectable amount. That hasn’t been the case with other major retail areas in the state.

Through November, Lawrence sales tax collections are up 2.5 percent. That’s not as robust as last year, when Lawrence had the highest sales tax growth rate of any major retail area in the state. Collections grew by 5.5 percent in 2016. This year, Lawrence will have to settle for having the highest growth rate of any community outside of Johnson County. Here’s a look:

• Lenexa: up 7.1 percent

• Shawnee: up 4.5 percent

• Olathe: up 2.7 percent

• Lawrence: up 2.5 percent

• Topeka: up 0.7 percent

• Overland Park: up 0.7 percent

• Saline County (Salina): up 0.1 percent

• Kansas City, Kan.: down 0.4 percent

• Sedgwick County (Wichita): down 0.9 percent

• Riley County (Manhattan): down 1.8 percent

Lawrence has seen sales tax growth every year since at least 2012. Not only has there been growth, it has been historically impressive growth. From 2011 to 2016, sales tax collections have grown by 23 percent. That’s better than the 21 percent growth rate compiled from 1997 to 2002, which were considered some of the heyday years for Lawrence growth and development.

If you are looking for something to dampen the enthusiasm, it is worth noting that the second half of 2017 has been weaker than the first half of the year. That may not be a great sign for 2018.

Regardless, barring something unexpected, Lawrence City Hall leaders should be pretty pleased with 2017 sales tax totals. The city is on pace to have a budget surplus in the sales tax category. If the December check comes in at about an average level, the city will collect about $1.6 million more in sales taxes than it budgeted for 2017.

But City Hall leaders quickly will point out some other categories are coming in below budget. One of those is use taxes, which is a cousin to sales tax. It is a special tax you pay when you buy an item from out of state and aren’t charged a sales tax. For reasons that aren’t entirely clear to me, the city’s 2017 budget called for a pretty large increase in one particular type of use tax. That particular increase hasn’t materialized — although use taxes have gone up, but not as much as budgeted. That shortfall means combined sales and use taxes for the city are on pace to come in about $800,000 higher than budgeted in 2017.

Still not a bad way to end the year. It sure beats sitting in the dark.