Morgan Hill's recent budget report reveals a projected deficit of $4 million annually, prompting concerns among city leaders about potential service cuts or tax increases. Despite efforts to boost revenue through attracting businesses, sales tax revenues have declined significantly, while rising costs continue to outpace income. The city’s reserve fund can currently cushion the shortfall, but it risks depletion by 2029, necessitating urgent corrective actions. City Council members stress the importance of addressing this financial crisis to avoid repeating the historical missteps of service reductions and community distrust.
We have to take this very, very seriously, said Councilmember Marilyn Librers, who recalled that in the late 90s, tight budgets forced the city to shut down several programs and services. This polarized the community and impacted public trust. Tackling this issue now is critical to ensure we don't repeat that history.
If we continue in the route that we're coming, then we're looking at probably layoffs in the future, said Councilmember Soraida Iwanaga. Council is going to have to start swallowing those painful pills of talking about taxes.
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