Published in the April 12 – April 25, 2017 issue of Morgan Hill Life

By Ken Murray

Ken Murray

During the past six to 12 months, Morgan Hill city management has been creating an awareness of the financial gap that exists between the costs to maintain our Morgan Hill lifestyle infrastructure and the budget available to meet these infrastructure needs. In November, the city and council made a critical decision not to pursue an additional tax rate increase to be placed on the ballot, a decision that most residents and the chamber supported. The potential consequences for the decision not to raise tax rates, however, was to face a continued degradation of city infrastructure, re-alignment of budget items, or find methods to increase tax revenues.

Our city government’s discretionary income is primarily derived from property, sales, and transient occupancy (hotel) taxes. Increasing the revenue from these sources through business growth rather than by raising tax rates is the clearly preferred option to meeting our growing community’s needs.

City staff recommended and the council recently supported incentives to bring a new Chrysler-Dodge-Jeep-Ram dealership to our community. The Morgan Hill Chamber of Commerce applauds these actions. While not sufficient in itself, the addition of the new dealership will be a measurable step in closing the budget gap for our city’s infrastructure requirements. The chamber supports and has been advocating for additional types of business growth incentives when appropriately and wisely used as a tool for economic growth.

Some businesses, by their very nature, do not generate direct tax revenues comparable to car dealerships. But these businesses can still provide exceptional job opportunities, generate direct tax revenues in excess of the cost of serving them and have a major secondary impact on tax revenues through the buying power of their employees.

There are other benefits to increasing jobs within our community: Increased revenues for existing local businesses, job growth for existing businesses and reduced commute times for some of our residents are but a few examples.
In the same way our city and council supported incentives for high sales tax revenue businesses and their associated jobs, the chamber encourages establishing a city policy for the appropriate use of incentives for professional job creating businesses which bring exceptional opportunities to our community. Having a policy “on the books” similar to the car dealership policy would send a clear message to prospective businesses — we want you in Morgan Hill.
We welcome the Chrysler-Dodge-Jeep-Ram Dealership and congratulate the city and council on a job well done. Let’s build on that success model and address the growing jobs/housing imbalance.

Ken Murray is chairman of the Chamber of Commerce’s Economic Development Committee.