Bucking a trend suggested by the State of Kansas’ recently-reported 1.8 percent drop in sales tax collections, a study of retail market data in the state’s 105 counties has shown that 22 counties actually had sizable increases in sales tax revenues during fiscal year 2001, which ended June 30.
The study, conducted by Kansas State University community development economist David Darling and visiting scholar Jia Liu, notes a state-high sales tax increase of 18.4 percent in rural Ness County, while the state’s retail heavyweight - Johnson County - had a slight drop (0.4 percent).
Their findings are now available in the annual report of county trade pull factors, which measure a county’s retail strength.
Johnson County, despite its FY01 loss, was still the state’s retail leader with a pull factor of 1.56. Pottawatomie County rose to second on the list, with a pull factor of 1.39, while Saline County, second in FY2000, fell to third this year (1.36).
A pull factor of 1.00 indicates a county is capturing as much trade as it is losing. A pull factor greater than 1.00 means the county is attracting more business than it is losing, and vice versa for counties with pull factors below 1.00.
Darling uses a county’s pull factor to determine its trade area capture and percent market share. Johnson’s County pull factor (1.56) indicates an effective customer base of 669,426, or 26.46- percent of the total retail activity in Kansas. The county generated more than $385 million in sales tax revenues for the State of Kansas last year.
"Trade tends to concentrate in the largest trade centers, [which] means that small businesses located in rural places such as Jefferson County lose trade to larger businesses in such trade centers as Lawrence, Topeka and Overland Park," Darling said. Sedgwick County has lost retail strength, according to the report.
The county’s pull factor was 1.20, only the seventh highest in the state. Still, its trade area capture was 538,156 customers and the county captured 20.36-percent of the state’s market share. The county generated more than $296 million in sales tax revenues for the state in FY01.
Ness County’s success was a huge contrast to the retail giants.
Ness County’s pull factor was 1.01 - the only county under 6,000 population with a pull factor over 1.00. Darling said the county may be benefitting from oil drilling activity.
Last year, Ness County generated more than $1.8 million in sales taxes for the state, though nothing for the county, Darling said.
Other counties with strong gains in FY01 (in alphabetical order) were Barber, Cheyenne, Comanche, Ellis, Ellsworth, Grant, Hamilton, Haskell, Jackson, Kingman, Kearny, Lane, Morton, Norton, Pottawatomie, Rice, Seward, Shawnee, Stanton and Stevens.
"The retail trade numbers provide a good insight into the economic health of each county," Darling said. "However, it takes a concerted effort to improve the retail environment. This is true even in places that have experienced job growth."
Darling also noted the significance of building new businesses, such as a new Wal-Mart Superstore in Cloud County.
"This will affect all these numbers in next year’s report," he said. "Based on past observations, area households will spend more of their income in Concordia and less in the surrounding, smaller towns, such as Belleville."
Darling said that K-State research has shown that three factors cause retail trade to change: population, income and the retail environment.
Other key findings Darling reported for the year 2001:
* Pull factors ranged from a low of 0.25 in Wabaunsee County to 1.56 in Johnson County;
* Wyandotte County’s sales tax collections dropped 3.3 percent in 2001, despite the fact that the county’s manufacturing economy was boosted by the recent construction of a NASCAR race track;
* Linn County suffered the state’s largest drop in sales tax revenue, 16.4 percent.
* The southeast region of Kansas had no counties with a pull factor above 1.00 (Neosho County was the highest county with 0.87).
Southeast Kansas residents tend to shop in malls and specialty shops in Johnson County; Joplin, Mo.; and Bartlesville and Tulsa, Okla., Darling said.
Darling’s data on FY2001 county trade-pull factors in Kansas is available
on his Web site at http://www.agecon.ksu.edu/ddarling