By Brittney Sherman
Morgan Hill has enjoyed positive sales tax revenue growth for ten straight quarters; however the 4th quarter 2022 results took a different turn.
When compared to 4th quarter 2021, sales tax revenue in Morgan Hill decreased 3%, while it increased 2.9% in Santa Clara County and 4.7% across the state overall. Morgan Hill’s change is largely attributed to a reduction in sales tax generation in the Business & Industry and Food & drug groups. Further attributing to the lack of growth was the Autos and Transportation group, which stayed flat for the first time since the boom in car sales ignited by the pandemic.
It’s not all doom and gloom. Sales tax revenue growth was seen in the General Consumer Goods, Fuel and Service Stations, and Restaurants and Hotels groups as a direct result of the continued shift back to brick n mortar shopping and in-office work. As it relates to the loses in the groups mentioned above, those are a direct result of both a misallocation and a one-time allocation skewing the 2021 numbers. For the first quarter of 2023, the City expects to see the return of positive sales tax growth.
Read the full report HERE.