City of Morgan Hill Bikeways, Trails, Parks and Recreation Master Plan

6 East Monroe Street | Fifth Floor | Chicago, Illinois 60603 | Phone: 312.447.2010 | Fax: 312.444.1125

Section 4: Existing Facilities Overview and Impacts | May 2017

Sports Market Business Strategy – Morgan Hill, CA

PAGE 40

FISCAL IMPACT

Fiscal impacts are tax revenues that result from the spending and income related to the activities at the

existing Aquatics Center and Outdoor Sports Center. This analysis estimates fiscal impacts for the

governmental units that levy taxes in the jurisdiction.

The fiscal impacts are the public sector’s return on investment. Fiscal impacts provide a partial offset to the

capital and operating expenditures required to support the facility. Although the incremental tax revenues

cannot be expected to pay for a publicly-funded project in full, fiscal impacts are important because they

improve the ability of the public sector to pay for the project. The overall economic impacts, including the

fiscal impacts, provide a rationale for public participation in a project.

Based on the spending estimates, Johnson Consulting projected the fiscal impacts from major categories of

tax revenues that are directly affected by a visitor’s activities: general sales tax and hotel tax, as shown i

Note that while the total sales tax is 8.75 percent, the City of Morgan Hill will receive 1 percent of gross

sales.

Table 4-7

The fiscal impacts represent only a fraction of the overall spending impact to the economy, as they are only

the public sector’s increase in tax revenue resulting from the overall increased spending in the economy.

Additionally, not included in the analysis are property tax estimates. Spending inside and outside the existing

Aquatics Center and Outdoor Sports Center would increase some of the values of commercial establishments

in the City of Morgan Hill, which result in increased property tax supported by the project.

VISITOR

RESIDENT SPENDING

This analysis differentiates impacts from spending by people coming from out-of-town and by Morgan Hill

residents, as defined below:

Morgan Hill Aquatics Center and

Outdoor Sports Center

Applicable Tax Rates

Rate

Sales Tax*

8.75%

Transient Occupancy Tax

10.00%

Source: City of Morgan Hill

*Total Sales Tax is 8.75%. City of Morgan Hill

receives 1% of gross sales