STATE, MUNICIPAL AND COUNTY BUDGETS Unit 7: North Carolina State and Local Government

State Gov’ts.- 1. Intergov’tmental Revenues —$ that 1 level of gov’t. gets from another level From where does most of the state’s intergov’tmental revenue come? For states, most comes from the federal gov’t. For what does the state get intergov’tmental revenue? States get intergovernmental revenue for welfare, highways, hospitals, etc. 2. Sales Tax —General tax levied on consumer purchases of nearly all products a. A % of the purchase price, which is added to the final price the consumer pays b. The merchant turns over the taxes to the proper state gov’t. agency on a regular basis Do merchants get reimbursed for acting as the state’s tax collector? Many states allow merchants to keep a small amt. of what they collect but NC does not! Why aren’t states pleased about shopping over the internet? B/c most internet sales are not subject to state sales tax & the states are losing revenue What states don’t have sales tax? AK, DE, MT, NH & OR What is the range of sales tax in states that do have it? Sales tax ranges from 2.9% to 7%, depending on the state 3. Contibutions—That states & state gov’t. workers make to their own retirement plans What happens to this contributed $ until it is needed to pay retirement benefits? It is invested until it is needed 4. Income Tax—State income tax rates vary a great deal What states don’t have a state income tax? AK, FL, NV, SD, TX, WA, WY

NC County and Municipal Budgets Like state government, each county and municipality must adopt a budget every year This shows county and city tax payers that money is being allocated wisely State law requires local governments to pass a balanced budget each fiscal year –Fiscal year ex. (July 1, June 30, 2013)

How do local governments get revenue? Revenue: The income that a government collects for public use. Property Taxes account for a large portion of local revenue Intergovernmental- money from state and national government to pay for services. Ex. Social Services, Education, Medicaid Sales Tax

How do local governments spend money? The amount of money that a government spends on programs in a year is known as EXPENDITURES. MUNICIPALITIES – Utilities- about one- third of their budget pays for operating utilities. Examples of utilities.. Water and sewer systems –Public Safety Ex. Police, Fire Services

How do local governments spend money? COUNTIES Education: 29% - Public-school education (K-12) Human Services: 28% - Medicaid, foster care, hospitals, social services, public health, mental health, child support, transportation Public Safety: 13% - Sheriff’s office, EMS, Fire Other: 13% - Parks and recreation, solid waste, libraries Debt: 9% - Bonds General: 8% - Register of Deeds, elections, building maintenance

Local Gov’ts.- 1. Intergov’tmental Revenues From where does most of the local gov’ts. intergov’tmental revenue come? States provide most of this revenue 2. Property Tax - a. Taxes that people pay on the land & houses they own What does real property include? Land & buildings Of what does personal property consist & what does it include? Stocks, bonds, autos, boats, planes, basically anything that can be moved b. Based on assessed value=Estimated value of each property used in the computation of the property tax 3. Other Sources- a. Revenue from water & electric utility systems b. Local option sales tax c. Local income tax d. Fines & fees Examples? Fines for traffic violations or fees for special services (like garbage collection) What are special assessments? Fees that property owners must pay for local services that benefit them in a particular way