How do local governments get their money and what is it used for?

Local governments are responsible for providing utilities to its community. Utilities are services needed by the public, such as water and electricity. Local governments are also responsible for planning and managing growth of the community by building roads, parks, schools, and making public safety decisions (laws).

Education One of the biggest responsibilities of a local government is providing public education. Education represents the largest expense local governments have. For the fiscal year 2012, the average local community spent 39% of their budget on education.

Through the use of a school board, local governments are in charge of public education from elementary through high school. Some local governments are responsible for community colleges- Cuyahoga Community College, Stark State, and Lakeland Community College

State government has a lot of say in education because it pays about 1/3 rd the bill. Because they pay for a large portion, they (ODE for example) set the standards for students and teachers. It is the responsibility of local governments to make sure the standards are being met and how the local district can do more than the state minimums.

The Federal government is also involved by helping to pay for buildings, federal lunch programs, and recently through competitive programs such as “Race to the Top”. “Race to the top” provides states with additional grant money based on the student and teacher performance.

Utilities Utilities are provided by the local government intended to meet the specific needs of the citizens: water, gas, electricity, water and sewage treatment plants, and garbage collection. For example: In Painesville, Ohio, the city has its own electric plant and residents are billed directly by the city.

Sometimes cities hire private companies to handle these services (government controls price). Example: In the City of Green, electricity is provided by Ohio Edison.

Health and Welfare Local government also provides its citizens with health and childcare, job training, and low-cost housing. The funding for these services comes from the state and federal governments. However, it is the local officials that decide how to spend the money.

Public Safety Local government is in charge of protecting and serving the public through police, fire, and ambulance services (most areas have 911). The public safety forces are also responsible for providing educational services to the community such as: providing kids with fire safety instruction, and DARE programs.

Local governments also hire people to make sure safety rules (codes) are being followed. EXAMPLE: Inspectors examine buildings to make sure they are not violating any safety codes (fire alarms, faulty wiring, plumbing, etc).

Land Use Within a community business and housing are built in specific areas of town. The resulting zoning regulations are created to keep businesses or manufacturing plants from being constructed next to residential housing.

The responsibility of determining what to do with the land in a community is given to a planning commission. These members are appointed to: Decide where to put parks and roads, what businesses to allow, monitor environmental issues, monitor and control the growth of the community.

Revenue and Paying for Services About 25% of local government revenue comes from property tax: a tax on land and buildings. Some communities, such as Ohio, also use a local sales tax.

Even if you do not live in a particular community, just traveling there may result in your contribution to their revenue. Local governments often charge for services (utilities), bridge tolls, park entrance fees, parking meters, and government businesses such as a parking garage as a way to raise money.

In certain circumstances, communities borrow money for short term needs from local banks. For long tern projects, such as building a school, local governments sell bonds.

Sharing Revenue Federal and state governments often give money to local government through intergovernmental revenue or grants. An intergovernmental grant is money given by one level of government to another.

Despite the options available, there are limitations. Many people are not willing to raise taxes in order to cover the expenses of a local government.. This can lead to the community suffering a financial crisis and result in programs sold to private businesses (government can no longer control price), services being reduced, or programs being cut entirely

If citizens do not want to pay more taxes but don’t want to lose programs….what other possible solutions are there?