Ellis County making strides

By MIKE CORN

Hays Daily News

It could have been something of a lackluster year in 2004 in Hays and Ellis County.

But then the oil and agriculture sectors stepped forward and saved the day.

Part of that is sheer speculation, but Kansas State University researcher David Darling is confident that's the case. Otherwise, he's at something of a loss to explain why Ellis County sales tax collections increased by 3.7 percent in fiscal year 2004 while statewide collections only increased by 2.7 percent.

Things started out slowly enough in 2003 and appeared to be headed for an otherwise flat year in terms of the economy.

But when oil prices jumped and cattle prices skyrocketed in the wake of a mad cow scare in the state of Washington, the economic effect was felt in many northwest Kansas counties.

At the same time that cattle prices shot up, activity in the oil patch increased dramatically. Likely, that prompted a boom in oil field supplies, which are available at supply houses in Hays, as well as in Ness and Rooks counties, where oil field supply houses also are located.

For comparison, suburban Johnson County sales increased by only 1.4 percent and Sedgwick County was essentially flat, increasing less than half a percent.

Saline County sales were flat during fiscal year 2004 compared to a year earlier, Darling noted.

But he also pointed out that Ness County, with a strong oil and gas presence, had a 6.8-percent increase in sales in fiscal year 2004 compared to a year earlier.

Rooks County was in the same situation, increasing 10 percent in FY2004 compared to a year earlier.

Both Rooks and Ness counties have a strong presence in oil field supply houses.

Russell County also had a 9.8 percent increase, likely the result of increased activity in the oil patch.

The only thing Darling can point to are the increases in oil and agriculture.

“Retail sales tax collections were flat in some of the trade centers and high in some of the outlying areas,” he said of his annual look at retail trade.

He thinks that's a result of three factors:

nÀan increase in oil and gas exploration

nÀdestination source taxing

nÀand “production agriculture has been profitable in many parts of Kansas.”

That profitability in agriculture surfaced in the second half of 2003.

“That drove the fiscal year 2004 retail activity to some degree,” he said.

Conditions in agriculture were considered even better in 2004.

As a result, he expects agriculture — and oil and gas exploration — to drive retail trade for fiscal year 2005, the results of which are not yet in.

Each year, Darling does an analysis that determines where the state's economic powerhouses are located.

There are the obvious ones, such as Johnson, Sedgwick and Shawnee counties.

In northwest Kansas, Ellis County is the economic powerhouse.

In fiscal year 2004, the most recent time period, Ellis County shows a pull factor of 1.38, which reflects a trade area capture equal to that of a county with 36,984 people.

Ellis County, according to 2003 census estimates, only has 27,212 people.

That means nearly 10,000 extra people shop in Ellis County, likely taking advantage of several stores that aren't available elsewhere in the region.

Ellis County continued its consistent retail growth last year and edged out Saline County in county trade pull factor — or how much business it pulls in rather than loses.

The pull factor for Ellis County rose from 1.36 to 1.38 while Saline County's dropped from 1.37 to 1.33.

Pull factors measure the relative strength of retail businesses. A county trade pull factor greater than 1.0 indicates that a county pulls in more shoppers than it loses.

“It's encouraging to see more people shopping here,” said Michael Michaelis, executive director of the Ellis County Coalition for Economic Development.

Johnson and Pottawatomie counties reported the highest pull factors for fiscal year 2004 (1.47 and 1.42 respectively) followed by Ellis County.

Michaelis said that Ellis County's increase can be attributed largely to both new businesses and growth among current businesses over the past year. New restaurants have opened in Ellis and Victoria and a number of retail stores have popped up in Hays.

“Those types of things obviously pull in sales,” Michaelis said.

How much the pull factor will increase once the Home Depot opens is uncertain.

But a study by one of Darling's students, Manjula Boyina, found that there is an increase — sometimes dramatic — with the addition of a big box store. She specifically looked at the placement of Wal-Mart stores.

Managing editor Mike Corn can be reached at (785) 628-1081, ext. 129, or by e-mail at mcorn@dailynews.net.