Changing Revenue and Expenditure Structure and the Reliance on User Charges and Fees in American Counties, 1972-2002

Abstract

This article examines changing revenue and expenditure structures in a panel of 2,698 American counties during the past 30 years at 5-year intervals. It also investigates factors affecting the degree of reliance on user charges in counties. The findings show that property taxes and total taxes as a percentage of total own source revenue began trending downward, whereas sales tax, user charges, and other taxes trended upward since 1977. The downward trend of property taxes and total taxes increased rapidly in the wake of tax and expenditure limitation (TEL) movements, which started in the late 1970s. With respect to the county expenditure structure and the growing role of counties as service delivery agents, the relative share of spending on traditional county services decreased slightly, whereas the share of municipal-type (local services) and regional-type services in general increased slightly. The findings also show that the presence of binding local TELs and the presence of state-level TELs led to an increase in the share of user charges and fees for traditionally charge-financed services. The findings also show that a modernized county structure led to an increase in the degree of reliance on user charges in counties.

Local revenue structure under economic hardship: reliance on alternative revenue sources in California counties

“…Finally, the potential and feasibility of nontax revenues depends on the functions and nature of the services county governments provide that may or may not be controlled by service demands. Previous studies found that service provision and expenditure mix may affect local revenue structure (Tannenwald 1990;Jung and Bae 2010). However, the data was not available and this study tends toward a more comprehensive look at local revenue structure focused on the factors that affect nontax reliance, regardless of where and how the nontax revenues are collected.…”

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“…Generally, compared with taxation, user charges and fees can establish a more direct link between individual payments and benefits from the provision of public services, and therefore they could provide useful market information about the desirable level of public services (Advisory Commission on Intergovernmental Relations [ACIR], 1987; Bird, 2001). The growth of user fees has been documented as a major way to circumvent the constraints caused by tax and expenditure limitations (TELs) in the context of the modern tax revolt (Jung & Bae, 2011; Mullins & Joyce, 1996; Preston & Ichniowski, 1991; Shadbegian, 1999; Skidmore, 1999; Sun, 2014). As the property tax cap is the most recent TEL policy in the United States, it provides an opportunity to directly investigate this possibility by asking village leaders, from a subjective standpoint, whether they agreed to this statement.…”

Race, Representation, and Revenue: Reliance on Fines and Forfeitures in City Governments

“…Census Bureau 2012). There are a variety of explanations for this increase: constraints on local government’s ability to raise revenue due to fiscal institutions such as tax-and-expenditure limitations (Brunori 2007; Hoene 2004; Jung and Bae 2011; Mullins and Joyce 1996; Shadbegian 1999); general fiscal stress (Downing 1992); and a concurrent increase in local government service provision of chargeable activities (Brunori 2007; Downing 1992).…”