Drop in sales tax revenues reported in KCK

Kansas City, Kansas, has experienced a drop in sales tax revenues recently, according to Unified Government officials.

Sales tax revenues came in at 91.9 percent of the amount budgeted for the fourth quarter of 2018, according to Kathleen VonAchen, the UG’s chief financial officer. She included the information in her April 1 quarterly budget report at the Economic Development and Finance Committee meeting.

Sales tax revenues for the fourth quarter were $42.6 million, as compared to the amended budget estimate of $46.4 million, a difference of about $3.74 million, according to UG figures.

For the fourth quarter, the UG revenues for sales tax were about double that of property tax, as the county and city now derive more of their income from sales taxes than in years before The Legends Outlets was built. The property tax for the fourth quarter came in about 1.2 percent over the estimates.

UG Commissioner Ann Brandau Murguia asked for more information about the reasons for the sales tax revenue difference.

“My sales tax estimate included a 6 percent increase, and that was probably overly optimistic,” VonAchen said at the meeting. “It’s a combination of my sales tax estimate being overly optimistic and the economy declining quicker than I anticipated.”

Some of that effect on sales taxes at The Legends Outlets may have been because there were renovations going on at some of the Legends locations, she said. Some of the properties were not open and not collecting sales taxes during that transition, she added.

When actual fourth quarter sales taxes in 2018 were compared to actual fourth quarter sales taxes collected in 2017, there was a decrease of $2.78 million, according to UG figures.

Commissioner Tom Burroughs said he believed that renovations and transitions at The Legends Outlets may have caused the reduction in sales tax. He said he also would like to see more information about it. The shopping center has more than 100 stores and restaurants.

New stores added within the last year to the Legends Outlets have included Torrid, Michael Kors, Rack Room Shoes, the Dapper Doughnut, El Toro Loco Mexican Bar and Grill, Journeys and HomeGoods.

In a more recent sales tax figure, March 2019 sales tax distributions in Wyandotte County were 14.4 percent less than March 2018 figures, according to a Kansas Department of Revenue sales tax distribution report. According to that report, $1.968 million was collected in March 2018 in Wyandotte County as compared to $1.685 million in March 2019.

Nearby Johnson County experienced an 8.5 percent drop in its sales tax during the month of March 2019, Shawnee County was down 6.8 percent, Douglas County was down 7.7 percent, Sedgwick County was down 4.6 percent, and Leavenworth County was down 6.7 percent.

March was characterized by some extreme weather in snow and rain, with some school closing days during the month.

Possibly affecting retail totals in areas other than The Legends, a Kmart store at 78th and State Avenue closed in late January 2019.

The three-month period of January through March saw only a .4 percent drop in Wyandotte County sales tax distributions from 2019 to 2018, according to figures on the KDOR website.