The Revenue Problem
DOI link for The Revenue Problem
The Revenue Problem book
State governments have long imposed various types of control on local finances. Regulations on local taxation, accounts, budgets, and indebtedness first came in the early 1800s. More restrictions grew out of the Great Depression of the 1930s, which caused local financial operations to collapse throughout the nation. Several states in this period placed cities facing financial emergencies in receivership. Local governments in the United States raise around 60 percent of their own general revenues, largely through taxes, charges, and fees. State financial aid to local governments consists of grants and shared taxes. Grants are usually designated for specific programs in such areas as education or transportation, though most states also provide unrestricted grants for general purposes. In the case of shared taxes, states act as tax collectors, returning all or a portion of the yield from a shared tax according to an allocation formula or on the basis of the revenues’ origin.