depend on the strength of their economies to generate healthy revenue
streams. The U.S. economy has been
recovering overall, even that unemployment rates are still above seven percent
and housing prices are still below pre-recession peaks. While the data from the U.S. Census of
Governments on 2012 county revenue sources has not been released yet, the 2007
figures provide a baseline for counties’ sources of revenue before the recession.
collected more than $525 billion in revenue in 2007, with more than a third
coming from taxes such as residential property taxes, commercial or business
property taxes and personal property taxes.
Property taxes are the bulk of the tax revenue raised by counties, at
almost 60 percent. While the 2008
housing crisis affected counties’ residential property tax revenues, the
strength and timing of the effects vary county by county. There is often a lag in the effect of changes in
housing prices on property tax revenue since properties are taxed on the assessed
values of the houses, which may lag for years if the county has a long
draw another third of their revenue from other levels of government, mainly
from the states. Eighty-three percent of the county revenue from other
governments came from the states, showing that counties are creatures of the
state. This allocation of state money
does not come entirely from state sources, but often from federal formula
allocations. Because states mix state
funding with federal funding in the allocation to counties, it is difficult to
track federal funding going to counties through the states.
little known fact is that charges and other general revenue sources generate 21
percent of the counties’ revenues. These
charges vary from charges on commercial activities to solid waste, sewerage
charges and highway tolls. Charges from
public hospitals deliver almost a quarter of this revenue stream, showing one
of the aspects of the relationship between counties and health care.
the constraints set by the states, county leaders continue to adjust budget policies
to adapt to the changing economic circumstances.