Tax plan will raise $75,000 a year for central business
district
Morgan Hill – The Morgan Hill Downtown Association is one giant step closer to a $75,000 yearly funding mechanism.
The association, pushing to establish a self-assessed tax district to raise funds for capital improvement projects downtown, earned a big nod from the Morgan Hill City Council on Wednesday.
In a 4-0 vote – with Mayor Dennis Kennedy absent – the council smoothed the way for the downtown tax to go to a simple “majority-wins” vote among property owners whose wallets would be affected. Results will be announced in late July.
The $75,000 raised by the tax would pay for downtown-oriented projects, such as beautification, marketing plans and parking and lighting improvements, according to the downtown association. There are about 180 downtown merchants.
The issue of kick-starting a tax district downtown grew out the city’s request to the association’s leadership to find a self-funding mechanism. For four years the city has allocated upwards of $90,000 a year to pay for the association, which launched in 2002 to give business and property owners a structured forum for discussing economic revitalization strategies.
Back when the association was started, the city made known the group should work toward raising money for its long-term survival.
Last year, the association endeavored to do just that, proposing a geographical area encompassing the downtown business district in which property owners would pay assessments to raise $250,000 a year for the association’s operation. But the original plan was never implemented.
“It was too much money,” said association president Gary Walton. “There was concern among some property owners that it was going toward overhead costs.”
This year the association came up with a scaled down version of the same plan, to raise $75,000 a year. None of the money goes toward overhead, Walton said.
Instead, administrative costs will probably continue to come from the city, but in smaller chunks. A “match” of about $70,000 was mentioned at the council meeting Wednesday, should the tax district be adopted July 26.
If approved, the city would have to pay an assessment of about $24,000 a year on property it owns downtown.
Morgan Hill Councilman Steve Tate noted the city would likely be paying close to $94,000 under the deal to support the association.
Tate and other council members said the tax district makes sense, insofar as it indicates assertiveness by the private sector to keep striving toward a more vibrant centralized business district.
The boundaries of the new district would be Main Street, Butterfield Boulevard, Dunne Avenue and Del Monte Avenue. Property owners would be annually assessed $0.0111 to $0.0593 per square foot, depending on location and if it’s a lot or building. Under state law, the tax would have a five-year life span.
