Public Finance - Part II - The Tax Basis in Clinton County

by Colin Read, November 22, 2010

Last month, we noted that government played a significant role in the Clinton County economy. Indeed, the two largest sectors in Clinton County are education and general government at the state and local level. They generated a combined 7,122 jobs within the region, or almost 20% of all employment. They also generated a number of secondary and induced jobs that account for an additional 14% of employment. In total, more than a third of all jobs are supported by state and local governments.

NAICS Sector	Description	Direct Number of Jobs	Labor Income	Average Salary
438	State and local education payroll	3,650	$228,666,100	$62,648.25
437	State and local government payroll	3,472	$226,627,600	$65,272.93
		7,122	$455,293,760	$63,927.80

Not only are these jobs an important part of the local economy - they also pay their workers 23.6% more than the average of the top ten sectors in the local economy, and provide benefits, in retirement and health care, that are rarely surpassed in the private sector. These are good jobs, by any measure.

Trends in the relative levels of spending are shown in the following graph:

The graph describes federal and state and local revenue sources and trends. We will now delve deeper into the local funding sources for local government job support, followed next in the series with the methods of assessment and exemptions that generate the largest share of local revenue.

The following data were drawn from the Clinton County fiscal year 2008 that ended in 2009.

Fiscal Year 2008	Municipal Name	Clinton County Total	County of Clinton	Clinton Cities	Clinton Towns	Clinton Villages	Clinton School Districs	Clinton Fire Districts
Population and Geography	Population	79,894	79,894	18,816	61,078	9,429	- -	- -
	Enrollment	12,233	- -	- -	- -	- -	12,233	- -
	Land Area (sq mi)	1,038.90	1,038.90	5	1,034.00	5.6	- -	- -
Levy and Assessment	Tax Levy	$130,138,136	$19,787,435	$8,058,209	$13,665,007	$1,223,750	$84,071,138	$3,332,597
	Full Value	$4,165,103,284	$4,165,103,284	$809,017,805	$3,379,515,386	$252,291,062	$4,707,659,912	- -

We see that a population of 79,994 residents was spread out over 12,233 square miles. The public education student enrollment in high schools and grade schools was 12,233 students. Property valued at $4.168 billion had a tax levy of $130.14 million in support of local government. However, property tax was only a portion of the local revenue base:

Fiscal Year 2008	Municipal Name	Clinton County Total	County of Clinton	Clinton Cities	Clinton Towns	Clinton Villages	Clinton School Districs	Clinton Fire Districts
REVENUES	Assessments	$115,955,773	$20,344,867	$8,120,697	$13,533,532	$1,223,344	$69,428,081	$3,305,252
	Other Real Property Tax Items	$23,132,396	$2,504,648	$2,215,966	$1,234,372	$23,671	$17,153,739	$0
	Sales and Use Tax	$64,278,154	$54,479,338	$3,660,078	$5,350,804	$787,934	$0	$0
	Other Non Property Taxes	$822,907	$260,758	$202,817	$288,237	$71,095	$0	$0
	Charges for Services	$65,449,457	$26,378,426	$26,599,464	$3,656,920	$8,368,764	$445,884	$0
	Charges to Other Government	$7,273,263	$3,038,382	$1,137,343	$1,787,920	$187,208	$806,897	$315,513
	Use and Sale of Property	$12,157,335	$5,064,209	$687,505	$947,018	$237,452	$4,827,019	$394,132
	Other Local Revenue	$15,457,988	$7,157,135	$2,463,352	$2,698,838	$300,713	$2,737,610	$100,340
	Local Revenue Subtotal	$304,527,272	$119,227,763	$45,087,222	$29,497,640	$11,200,180	$95,399,230	$4,115,237
	State Aid	$149,330,314	$23,955,087	$4,813,457	$3,113,085	$578,622	$116,849,063	$21,000
	Federal Aid	$28,894,473	$17,328,286	$722,832	($13,004)	$2,000	$10,714,435	$139,925
	Total Revenues	$482,752,059	$160,511,136	$50,623,511	$32,597,720	$11,780,802	$222,962,728	$4,276,162

We can see graphically the funding sources for Clinton County in the following pie chart:

State aid represents by far the largest revenue source for the County, at 46.2% of all revenue. This state aid is directed predominately. Education absorbs 78.2% of all state aid coming to the County.

The next largest sector is the revenue generated from real property. This source is larger than the next two sources combined, sales taxes and fees for service. A little more than half of the real property tax revenue also supports education.

The remainder of the property tax revenue remains sonly lightly larger than the next most important source of revenue for local government services, the fees that the County collects for services such as to the Department of Motor Vehicles.

We can compare the relative size of these two major sectors of government services and education, as shown below:

The assessed value of property is used as the basis to generate tax revenue for general government and special programs in a municipality like fire suppression, sewer and water, and roadways, and the separately levied tax on property to support schools.  Critical to these assessments is the method by which we identify the value of property. In the next article in the series, we will discuss the property assessment method that supports the majority of local spending. We will also describe the exemptions and payment in lieu of taxes (PILOT) programs that reduces the base upon which property tax revenues are generated.

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