Downtown business owners have some questions about a proposal by
city hall to share sales and use tax data with a downtown
development consultant.
Downtown business owners have some questions about a proposal by city hall to share sales and use tax data with a downtown development consultant.
As part of its consent agenda for tonight’s meeting, the city council will consider allowing David Heindel of Heindel Mortgage Group to view detailed sales and use tax revenue data provided by the state board of equalization.
The purpose of sharing the information, which includes individual sources of sales tax revenue from local businesses, is to assist Heindel in his efforts to implement the city’s downtown redevelopment plan, according to assistant city manager Leslie Little.
Sales tax revenues collected from individual businesses are confidential, though the city can share vague data with the public such as total revenues and sales tax collected from categories of businesses such as general retail, transportation and hotel occupancy taxes.
Only a handful of city employees are currently authorized by the city manager to view the sales tax details, Little said. Those include Little, the city manager, the finance director and his assistant.
Those staff members use the data to make income and budget estimates, identify trends, forecast revenue projections, and make economic development strategies, Little said.
Specifically, Heindel would use the information for a “retail strategy” to attract new tenants as the downtown is redeveloped in the coming years, Little said.
“Understanding what our sales tax numbers are, and where we have capacity, where we are overachieving, or where there might not be as much capacity is significant,” Little said.
She added that Heindel, a former full-time city employee whose responsibilities were similar to those he has now as a consultant, had access to the information when he was a staff member. Employees with such access are aware of the strict confidentiality requirements related to sharing the information, Little said.
The owner of a downtown restaurant still wonders why such details are needed to draft a business strategy. *”If you need that, you can use demographics,” said Deb Creighton, owner of Huntington Station. “Why do you need sales tax information?”
Creighton added that private businesses do not seek their competitors’ or potential neighbors’ sales figures when contemplating business decisions such as changing locations or sales strategy.
The city receives 1 percent from the sales of most private business transactions in Morgan Hill. In fiscal year 2010-2011, the city received a total of $5.2 million in sales tax revenues – a “significant” source of discretionary funds, Little said.
The council meeting will take place at 7 p.m. tonight at city hall, 17555 Peak Ave.
