The People's Money: Pensions, Debt, and Government Services by Michael A. Pagano

Author:Michael A. Pagano [Pagano, Michael A.]
Language: eng
Format: epub
Tags: Political Science, General, Public Policy, City Planning & Urban Development, Social Science, Sociology, Urban, Business & Economics, Government & Business
ISBN: 9780252042911
Google: LOVqxAEACAAJ
Goodreads: 44803903
Publisher: University of Illinois Press
Published: 2019-09-16T00:00:00+00:00

TRENDS IN THE REVENUE STRUCTURE OF LOCAL GOVERNMENTS

This section uses Census of Governments data on different types of local governments to examine trends in methods of financing all local goods and services and specific services in municipalities.

Trends in Financing All Local Government Services

Prior assessments of revenue trends in local governments show that as a percentage of revenue (counted as total revenue, general revenue, and own-source revenue), property taxes have declined greatly since the mid-twentieth century.37 By comparison, reliance on charges has increased as a percentage of these governments’ revenue, which is particularly evident in municipal and county governments. Table 1 shows these trends a little differently than most other studies by removing significant enterprise charges from the denominator in the own-source revenue ratios.38 Enterprises are excluded here because financial decisions about these services are made separately from financial decisions about governmental funds and there is an expectation that enterprise services should be supported entirely by charges. Thus, excluding enterprise funds from calculations of trends in reliance on property taxes and other revenue sources presents a more realistic picture of changes in local governments’ revenue structure for general operations.

The table shows that property taxes as a percentage of own-source revenue minus enterprise charges have declined since 1972 for municipalities and 1982 for counties, but increased from 2007 to 2012 as a result of the Great Recession’s impact on other governmental revenue sources.39 The table also shows that reliance on governmental charges has steadily increased for municipalities since 1972 and counties since 1982. Reliance on sales taxes have also increased steadily for counties since 1982, but the increase in sales taxes as a percentage of own-source municipal revenues has been somewhat irregular for municipalities since 1972, with the largest increases occurring from 1972 to 1982. The table also shows that enterprise charges as a percentage of all charges in these governments have decreased during these time periods. When viewed in conjunction with the increased reliance on charges for nonenterprises, this suggests that governments are charging for more services than in the past and also charging more for services that are funded primarily by general taxes through the general fund.

Table 1. Local government revenue trends, 1972–2012 Sum of revenues for all governments

Municipalities

% Own-source revenue (no enterprise charges)a % Enterprise charges of all Chargesa

Property taxes Sales taxes Charges

1972 50.4 14.7 9.9 77.9

1977 46.7 17.3 11.1 78.9

1982 36.4 19.0 12.1 80.4

1987 32.7 18.8 11.9 79.4

1992 36.5 18.3 13.7 76.9

1997 33.2 19.7 15.5 74.9

2002 33.1 20.1 15.9 73.8

2007 32.0 18.8 15.3 72.4

2012 37.3 20.1 16.7 73.1

Counties

% Own-source revenue (no enterprise charges)a % Enterprise charges of all Chargesa

Property taxes Sales taxes Charges

1982 53.9 11.2 12.5 61.0

1987 49.0 12.6 12.7 56.3

1992 50.8 12.6 15.2 52.5

1997 46.1 14.8 17.9 51.9

2002 45.5 14.5 18.7 49.4

2007 45.8 14.6 18.0 49.6

2012 51.7 15.0 18.3 53.5

Source: US Census Bureau, Census of Governments, vol. 4, Governmental Finances, no. 4, Finances of Municipal and Township Governments, 1–2 (72–82), issued September 1984 (Washington, DC:US Government Printing Office, 1982), www2.census.gov/govs/pubs/cog/1982/1982_vol4_no4_fin_muntwp.pdf; US Bureau of the Census, Census of Governments, vol.

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