Kansas Crimson

TraditionKU wrote: ↑Sun Jun 23, 2019 7:53 am 3.5” of rain and counting

wedding planners need to be kept warm too, ousie

Feral wrote: ↑Tue Jul 23, 2019 6:53 pm Sprint sold Overland Park campus for ‘modest’ price. Why that might not be a bad thing

Month after month, officials around Johnson County are watching the sales tax numbers come in, hoping they’ll improve.

It doesn’t make sense. The economy is humming, the tax base is growing and the unemployment rate is historically low. But in the most affluent county in Kansas, retail sales tax revenues — among the key sources of funding that cities use to function — is flatlining or even shrinking.

“It makes you go, OK, well what is going on here? And we don’t have an answer for it,” said Merriam City Administrator Chris Engel.

The mystery pervaded an Overland Park budget discussion earlier this month. “I don’t think anybody today can quite figure out what’s going on in Johnson County and the state of Kansas, when nationally, and internationally, economies are growing,” Bill Ebel, Overland Park’s city manager, told city council members. “I don’t mean to be worrisome, but it’s real and we’re watching it, and we need to see some positive movement.”

[...]

“We’re scratching our heads, but we still have some time to make up for it,” Engel said. “This is what all of us in local government are telling ourselves with our fingers crossed.”

In the meantime, revenue officials have been trying to pinpoint the causes of sales tax declines.

“It’s kind of puzzling to everybody to figure out if it’s something economic going on in the state or if it’s the e-service type of business that people are going to every year,” said Steve Stotts, director of taxation at the Kansas Department of Revenue.

The most significant culprit is a change in consumer habits as people are more likely to skip a trip to Walmart and order from their laptop. But online sales alone can’t be responsible, Stotts said, as they’re a small piece of the retail pie.

Taxes on online sales grew by 6% last year, but they were still less than a fifth of overall retail sales taxes. It would also stand to reason that a trend toward online sales would affect other states, which hasn’t been the case. Missouri, for example, has seen about a 3% growth in sales tax, Department of Revenue data showed.

“The surrounding states all had much better growth than we did. That’s why we all are kind of confused about what’s going on,” Stotts said. He said that in April the state met with economists from universities and different agencies in Kansas, and the sales tax trend was “puzzling” to everyone.

Beyond online sales, two other main factors are squeezing governments’ bottom line, said Chris Kuehl, co-founder of Armada Corporate Intelligence, a Kansas firm specializing in economic forecasting.

First, millennials tend to be “experience buyers,” he said, preferring to pay for events, like concerts, going out to eat or travel, rather than spending more consistently on traditional retail as older buyers do. The public also seems to be spooked as fears of slowing economic growth have taken “a little bit of bloom off the rose.”

“Nationally, we’re seeing consumers continuing to spend, but they’re expressing a lot more trepidation,” Kuehl said. “We keep waiting for the other shoe to drop.”

Another possible reason is an overuse in tax incentives for new developments, he said. Future sales tax revenues are diverted to pay some construction costs. These incentives, he said, can quickly become leeches on sales tax collection.

ousdahl wrote: ↑Tue Dec 03, 2019 12:01 pm what's going on here?

ousdahl wrote: ↑Tue Dec 03, 2019 12:01 pm what's going on here?

CrimsonNBlue wrote: ↑Fri Dec 06, 2019 4:14 pm