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Lawrence sales tax collections off to slow start in 2018; chain retailer with downtown location files for bankruptcy

My family jump-started the Branson, Mo., economy last week by traveling to Silver Dollar City and its new roller coaster, the Time Traveler. (Note: It is called Time Traveler because by the time you are finished standing in line, you are in a new century.) Thus far, Lawrence is still waiting for something to jump start its economy in 2018, according to the latest sales tax reports.

The city now has received its sales tax distributions for January and February, and Lawrence isn’t doing as well as several other area communities. That is a reversal of the trend of the last couple of years, when Lawrence was near the top of the pack in terms of sales tax growth.

Through February, Lawrence’s sales tax collections actually are down by 0.5 percent year-to-date compared with the same time period a year ago. It is still early in the year, so not too much should be made of the decline. Plus, the early results have been pretty inconsistent. January sales tax collections — which, due to the lag time in reporting, actually represented sales made in December — were up by 4.1 percent compared with January 2016. So, that may be a sign that local retailers had a pretty decent Christmas shopping season. But February’s sales tax collections were down by 4.4 percent compared with a year ago. Thus far, sales tax collections have been a bit like that roller coaster. (Note: While intense, the Time Traveler is not the scariest attraction in Branson. That is still the Tanger Factory Outlet Mall.)

Perhaps more interesting is that Lawrence is getting off to a slower start to 2018 than many other area communities. Of the 10 large retail communities I track, six of them posted increases in sales tax collections compared with a year ago. Lawrence was part of the group of laggards, which is a departure of the trend from the past couple of years. Here’s a look:

— Kansas City, Kan.: up 37.2 percent

— Olathe: up 4.6 percent

— Lenexa: up 3.5 percent

— Overland Park: up 2 percent

— Shawnee: up 1.7 percent

— Saline County (Salina): up 1 percent

— Lawrence: down 0.5 percent

— Sedgwick County (Wichita): down 0.9 percent

—Topeka: down 1.7 percent

— Riley County (Manhattan): down 5.1 percent

Sales tax collections are important for a couple of reasons. One, they provide a glimpse at the health of the local retail industry. But sales taxes also have become a critical part of the City of Lawrence’s budget. The city is counting on sales and use taxes to generate $40.2 million worth of revenue for the 2018 budget. Even with sales tax collections being down a bit from last year, the city is still on pace to meet its budget for 2018.

But it is still early, and if February’s collections mark the beginning of a new trend, the city will find itself in a hole.

In other news and notes from around town:

• I guess I should tell you to keep an ear open for news about Claire’s, but be warned that the company tends to pierce any ear it gets hold of. Claire’s is the national chain that sells jewelry geared to the teen market and bills itself as the leading supplier of ear-piercing services in the U.S. The company has a store at 647 Massachusetts St. in Lawrence.

Claire’s on Monday announced that it has filed for Chapter 11 bankruptcy protection. However, if you are to believe the most recent statements from company officials, the Lawrence store shouldn’t be at any risk of closing.

The company said via a release that it has reached agreements with several of its major lenders to restructure its debt. The company said its operations have been improving and are profitable. However, it was saddled with large amounts of debt left over from a previous private equity buyout.

The company plans to eliminate about $1.9 billion in debt as part of the bankruptcy process. It plans to emerge from bankruptcy in September.

Comments

Steve Jacob

Interesting that both Toy's R Us and Claire's had the same story, bought by a private investment firm at the height of the market, 2006-07, so that means they overpaid and had to much debt. The debt meant they could not update stores or pay better salary to it's employees. The one difference was Claire's is still profitable, I think they just wanted to break leases in declining malls, Toys R Us is just done.

And it's also a cautionary tale of the future. All these mergers now, companies are getting bought out at the market high, taking bigger risk because the rates are so low.

1 month ago

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Richard Heckler

Are taxpayers sick yet of becoming the insurance for risky lenders financing homes and commercial properties at INFLATED VALUES?

Shouldn't these lenders be allowed to go under and their management prohibited from ever working in the lending industry ever again?

Conservatives pushing hard for privatization of taxpayer owned services while at the same time lending institutions are financing homes and other properties at seriously inflated values indicates another loan scam is on the horizon.

Again under a conservative administration.

Inventories of homes for sale continue to drop. Markets are tight and inflated residential values are soaring.

1 month ago

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Richard Heckler

The same data is being heard throughout the USA. Which brings me around to some very stinky stuff.

Markets get tight, home loan scams surface and market values drop significantly. To the point where a respectable number of home owners suddenly owe more than their property is worth.

Then of course homes up for repo spike as jobs are lost.

Lending institutions begin to whine as politicians start yelling banks are collapsing blah blah blah.

Bailouts for the reckless lenders seem to be the taxpayers responsibility. How can that be? Why should taxpayers be the insurance to cover reckless management?

Mortgage meltdowns actually begin with the bursting of an intense selling “bubble” in which home values have been irresponsibly over valued.

A housing bubble is an economic bubble that occurs in our real estate markets.

It is defined by rapid increases in the valuations of real property until unsustainable levels are reached in relation to incomes and other indicators of affordability.

Following the rapid increases are decreases in home prices and mortgage debt that is higher than the value of the property.

Beware.

Current Senate banking bill likely to boost chances of bank bailouts, CBO says

https://www.washingtonpost.com/news/w...

1 month ago

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Richard Heckler

How many remember any of this?

Conservatives DELIIBERATELY CRASHING THE ECONOMY
http://www.guardian.co.uk/commentisfr...

--- Conservatives Reagan/Bush Savings and Loan Heist http://www.dailykos.com/story/2014/12...

Clinton’s Conservative policies sent the economy seriously off course.
http://www.huffingtonpost.com/dean-ba...

--- Conservatives Bush/Cheney Wall Street Home Loan Heist
http://www.dollarsandsense.org/archiv...

http://www.dailykos.com/story/2009/02...

--- What Did Conservatives Do With $700 billion of bank bail out money?
http://www.democracynow.org/2009/9/10...

--- Still A Bad Idea –The Conservative ENTITLEMENT Package for the wealtiest 1% which is still producing a dysfunctional economy.
http://www.dollarsandsense.org/archiv...

More is coming so I read ....

1 month ago

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