Maximize nontax revenues – Many local governments collect fees for water and sewer, recreation, etc. They may also collect fines, court costs, etc. Many public and private agencies, along with nonprofits, provide competitive grants to help achieve their mission. For example, state agencies may offer grants to help develop local parks while the Federal Government may offer transportation planning grants.
A variety of grants are available from state and Federal sources. Local residents and businesses fund these grant programs when they pay taxes. It is the responsibility of local government to make sure they get their fair share in return. Federal grants can be accessed at www.grants.gov.
Maximize the transfer of intergovernmental funds – Local governments must make sure they are receiving their fair share of intergovernmental transfers. These transfers from one level of government to another are most often used to fund general government or specific programs. For example, where I live in North Carolina, the State collects income taxes from residents and then turns around and pays local school teachers. If a community has 500 school teachers and only 250 of them live locally, the community is only getting half their tax money back. Also, a community with underutilized prison facilities may be able to contract with other levels of government to house prisoners for a fee.
Economic development – Local economic development programs attract outside revenue by recruiting, expanding, retaining, and starting businesses that pay property taxes and employ local workers who pay property taxes. Many local governments help fund economic development efforts because residents and voters want and need good paying jobs while governments benefit from capital investments. Outside revenue is attracted when businesses from outside the community invest locally and pay property taxes. Outside revenue is also attracted when individuals living outside the community invest in residential, vacation, and commercial property. Sales taxes paid by tourists, visitors, and outside shoppers are also new money.
Community development – Activities and programs to improve the local community attract outside revenue by enticing companies and residents from outside the community to invest locally. For example, a retiree living in a neighboring city may decide to invest in a second home. When the retiree pays property taxes, outside revenue is attracted to the local economy. Also, when a business headquartered in a neighboring state decides to establish a branch plant in the community, the property tax bill is sent to the headquarters location for payment, generating a flow of new money.
Many community development activities are the responsibility of local government and include things like: beautification, safety, recreation, education, open space, restoration, planning, etc. A great community development program makes it easier to attract quality businesses, highly skilled workers, entrepreneurs, professionals, retirees, young people, home-based business, telecommuters, etc.