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?

What is the relationship between local, state, and federal governments?

General Relationship With the rapid growth of suburbs in the 1950’s governments started to work together in order to accommodate the rapid changes. For example: In the 1950s the counties around Detroit formed the “councils of governments” to deal with the needs of the growing community and the demand for services.

Other cities soon followed. The United States Conference of Mayors met to deal with problems facing all of the cities and come up with potential solutions.

Conflict One of the largest conflicts between local communities is Economics. Communities often compete for new businesses as businesses bring in high revenue through property taxes and jobs for its citizens.

A second form of conflict is the result of zoning. While a city may not be able to put a factory next to residential housing within their own city limits, there is nothing to stop them from putting one up next to the homes of a neighboring city.

COOPERATION Despite the potential for conflict, communities do cooperate with each other. In times of emergencies (natural or accidental) neighboring Fire and EMS often respond.

Counties can also help by building hospitals to serve small towns. Example: Lake Hospital System.

Relationship Between Local and State Governments Some states have a strong voice in determining how local governments are set up. Others, allow them to use home rule giving cities the right to create their own charter and chose its form of government. Whether the state has a strong voice in the organization of the community or it is through home rule, most states give communities freedom to handle local issues.

Conflict Conflict comes when the local community and state have different opinions regarding legislation or how to provide services to the citizens. For example: California wanted to build a new sewage treatment plant in Arcata. The state received federal funding to cover most of the expense, but the city would have to pay millions as well. Arcata countered with plans for a cheaper sewage plan, yet the state refused to agree. After two years of meetings between state and local officials, Arcata won the right to build the system of their choice.

Arcata’s plant combines a wildlife sanctuary with the Arcata Marsh In disagreements between local government and the state, usually the state wins.

Cooperation State and local governments do work together at times to solve local problems. They work together on parks (policing and maintaining), roads (ask for input from city council on new construction), finance, law enforcement (training and licensing), health care, & education (training and licensing).

Relationships Between Local, State, and Federal Governments The key to the relationship is money. Federal money is given to local and state governments to meet national goals or objectives. For example: Federal money is provided to states for job-training programs. It is then up to the states to determine how to divide the money among the local governments. The federal government can also give aid directly to local governments.

Conflict “More money, more problems”. There are often disagreements as to how to spend the money given provided by the federal government and who gets it. Sometimes the goals of the federal government (what the money is intended for) do not match the local needs.

If local governments want freedom to set their own policies, then they may forfeit federal grants. However, most communities cannot afford large scale projects without federal help Cooperation Local, state, and federal agencies cooperate in environmental protection goals, but also when an environmental concern arises: (oil spills, the gasoline leak near Columbus, tanker truck accidents, etc) They also work closely together in law enforcement: training and criminal investigations.