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By Tim Brown, Operations Manager, County Information Project |
WHILE TEXAS COUNTIES AND CITIES ARE FUNDED primarily through local property and sales taxes, many states provide a significantly larger revenue stream to their local governments, often in the form of “revenue sharing” or other some other significant funding mechanism from state government. Based on data from the National Conference of State Legislatures, the states provided anywhere from 10 percent in Hawaii to 55.4 percent in Vermont of their local governments' general revenues. The chart below shows how much state funding the 22 most populous states provided their local governments, including counties, cities and schools.
According to this five-year-old data, Texas provided 26.5 percent of local government general revenues and ranked 21st of the 22 states, between Colorado (22nd) and Florida (20th). But it's important to note that, in Texas, 86.4 percent of that went to school districts while counties received 7.2 percent and cities, which make much greater use of the sales tax, received 3.1 percent.
And keep in mind that over the next year or so, it’s very likely that the Texas figures will change significantly because of the Legislature's commitment last summer to finance a buy-down of school district property taxes through the new margins tax on business. Texas' Legislative Budget Board has estimated that by 2009, the state will be sending more than $10 billion in additional funding to school districts. By that year, the state should be providing more than 40 percent of all local government general revenues in Texas, assuming both an accurate estimate from the LBB and a 5 percent annual revenue growth rate.
