Seth Grigg Executive Director Association of Idaho Cities This Presentation Will Cover Services Provided by Counties Cities and Special Districts Major Revenue Sources for Idaho Local Governments ID: 390145
Download Presentation The PPT/PDF document "Local Government Services & Revenue ..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Local Government Services & Revenue Sources
Seth GriggExecutive DirectorAssociation of Idaho CitiesSlide2
This Presentation Will Cover
Services Provided by Counties, Cities and Special Districts.
Major Revenue Sources for Idaho Local Governments.
Local Government Service Delivery and Funding Challenges.Slide3
Counties ― The Basics
County officers and organization set forth in Idaho Constitution.
Constitutional grant of police power.
County boundaries, powers and responsibilities set in Idaho law.
Counties provide a mix of state mandated and discretionary services.Slide4
Public Safety Services Provided by Counties
Law EnforcementJails
Emergency Dispatch
Juvenile Detention & Probation
Adult Misdemeanor & Felony Probation
Ambulance Service Slide5
Judicial & Legal Services Provided by Counties
Facilities & Staffing for District & Magistrate Courts
Prosecution of:
Felony Offenses (committed inside or outside of city limits),
Misdemeanors (committed outside city limits),
State Traffic Infractions (committed outside city limits), and
County Ordinance Violations
Public Defense for Indigent Criminal DefendantsSlide6
Public Works & Growth Management
Services Provided by CountiesLandfills & Solid Waste Collection
Roads & Bridges
Planning & Zoning
Building Code Enforcement & Permitting
Parks
Airports Slide7
Other Services Provided by Counties
Indigent Medical CareProperty Tax Assessment & Administration
Elections
Recording
Marriage Licenses
Motor Vehicle Registration
Fairgrounds
Extension Offices Slide8
Cities ― The Basics
Form, creation, powers and responsibilities defined by Idaho law.
Constitutional grant of police power.
Formed by their inhabitants to provide services for urban community.Slide9
Public Safety Services Provided by Cities
Law EnforcementFire Protection
Ambulance Service
Animal ControlSlide10
Public Works Services Provided by Cities
Domestic Water
Wastewater Treatment
Solid Waste Collection
Power Generation & Distribution
Streets & Bridges
Airports
Irrigation Water
Cemeteries
Parks Slide11
Other Services Provided by Cities
Planning & Zoning
Building Code Enforcement & Permitting
Cemeteries
Libraries
Public Transportation
Prosecution of State Traffic Infractions, State Misdemeanors, and City Ordinance Violations Committed in CitiesSlide12
Special Districts ― The Basics
Form, creation, powers and responsibilities defined by Idaho law.
Don’t have lawmaking power (exception for ACHD).
Services provided include:
Schools Water
& Sewer
Highways
Fire
Protection
Cemeteries LibrariesSlide13
Major Local Government
Revenue SourcesSlide14
The Budget as a Policy Document
The budget is the most important local government policy document.The budget heavily influences the strategic goals and objectives of local governments, as well as their ability to carry out state and federal mandates.
Local government budgets have a profound impact on:
Public health and safety,
Community development,
Economic development, and
Children, the elderly, and society’s most vulnerable.Slide15
Catch-22 of Local Government Budgeting
Local governments regularly find themselves caught between conflicting state and federal policies/priorities:On one hand, federal and state mandates require local governments to deliver certain services.
On the other hand, the state restricts local governments’ authority to raise the revenues necessary to pay for these services.
Two examples:
Stormwater
management, and
Trial level indigent public defense.Slide16
Property Tax ― The Basics
Most significant revenue source for most local governments.Has funded local governments since territorial days.
Local governments have operated under various budget freezes and property tax caps since the passage of the 1% Initiative in 1978.Slide17Slide18Slide19
Understanding the 3% Cap
Applies to cities, counties and non-school special districts.Increases in total property tax budgets are limited to 3% over the highest levy of the past 3 years, plus growth factors for new construction and annexation.
Can recover property tax increases foregone in previous years.
3% Cap doesn’t apply to voter approved bond or override levies.
3% Cap works alongside levy limits for particular funds—e.g. city general fund levy limit is .009.Slide20
Idaho’s Property Tax System
Compares Favorably to Other States Idaho’s property tax burden measured by personal income is 24% below the U.S. average, which ranks Idaho at 38
th
in the nation.
Idaho has the lowest property tax burden measured by personal income of our neighboring states.
Source: Idaho
Tax
Commission Study for FY 2011 http
://tax.idaho.gov/reports/EPB00074_10-23-2013.pdfSlide21
Property Tax Issues
Most counties are at the levy limits for Justice, Current Expense, and District Court funds.School Districts are increasingly relying on supplemental levies.
Considerable change has occurred over the more than 30 years that tax levy restrictions have been in place.
The City of Hayden had a population of 2,500 in 1980 and now has a population of 13,500.
The city is locked into a very low levy rate and now faces serious challenges funding law enforcement, street maintenance, and other services expected for a growing community.Slide22
The Budget & Creditworthiness
Fund balance as a percent of revenue and taxable valuation trends are two important
credit rating
metrics.
Recent negative trends in these areas have caused Moody’s Investors Service to perform a “deep dive” on all Idaho school district bond ratings.
Several Idaho school districts have recently experienced downgrades in their underlying bond ratings.Slide23
Fees
Commonly charged for:
Water service,
Sewer service,
Trash service,
Power service,
Building permits, and
Development permits.Slide24
Restrictions on Fees
Fees must be reasonably related to the cost of providing the service.
Local governments are required to publish notice and hold a hearing prior to establishing new fees or increasing fees more than 5%.Slide25
Challenges Related to Wastewater Utilities & Fees
Costs for cities and sewer districts of complying with federal water quality mandates continue to skyrocket with no end in sight.
Hundreds of millions of dollars of improvements are required to comply with stringent new discharge permits.
Although the state is transitioning into primacy over the NPDES program, we still have to comply with federal mandates. State primacy will help at the margins, in implementation.Slide26
Revenue Sharing
Local governments receive $150 million annually from the state revenue sharing program, which allocates 11.5% of sales tax revenue to cities, counties and non-school special districts.
Two formulas have developed over the years:
The County Distribution was established to dedicate revenue from the newly enacted sales tax to replace the lost revenues to local governments following repeal of the property tax on business inventories in the 1960s.
The State Distribution was established in the late 1980s to assist cities and counties that faced budget freezes in the wake of the 1% Initiative and to help offset the loss of federal general revenue sharing funds.Slide27Slide28
Issues with Revenue Sharing
Just as the state faced declining sales tax revenue during the Great Recession, local governments saw revenue sharing dollars decline from the high point in FY 2007.
Revenues have now returned to the pre-recession level.Slide29
Highway Distribution Account
Distributes revenues from state fuel taxes, vehicle registration fees, and miscellaneous transportation-related fees, fines and forfeitures.
Provides over $300 million in revenue annually.
Allocated:
57% to Idaho Transportation Department
38% to Local Highway Jurisdictions (Cities, Counties, Hwy. Districts)
5% to Idaho State PoliceSlide30
Highway Distribution Account
The local share of HDA revenue is allocated:
30% to cities (apportioned on the basis of population), and
70% to counties and highway districts (apportioned on the basis of vehicle registration revenue and improved road miles).Slide31
Issues with Road & Bridge Funding
Idaho’s fuel tax is levied on a per gallon basis. The last increase in fuel taxes and vehicle registration fees was in 1996.
More fuel efficient cars and consumers’ reluctance to pay high fuel prices have constrained fuel demand.
HDA revenues have been stagnant for over a decade. On an inflation-adjusted basis, HDA revenues have declined 30% since 1999.
Local Highway Jurisdictions are increasingly relying on property taxes to fill this gap.Slide32Slide33
State Liquor Account
Allocates $60 million annually in proceeds from Idaho Liquor Division.
Revenues split equally between the state and local governments.
Local share is split 60% to cities, 40% to counties. Amounts apportioned on a point of sale basis, or population basis for cities that don’t have liquor stores.
Hold harmless provision guarantees local governments will receive at least the apportionment they received in FY 1981.Slide34Slide35
Issues with State Liquor Account
Counties are required to spend 50% of liquor fund revenues on out-of-district tuition for county residents enrolled in one of Idaho’s three community colleges.An increasing number of counties are spending 100% of liquor fund revenues on out-of-district community college tuition reimbursement.
If liquor fund revenues cannot cover out-of-district tuition reimbursement requests, counties must levy property taxes to pay for any outstanding balances.Slide36
Federal Land Payments
Federal and state lands are exempt from property taxation.Federal government established PILT (Payment in Lieu of Taxes) program to compensate counties for federal tax exempt lands. Only counties receive PILT.
PILT can be used for any general government purpose.
Federal Government established SRS (Secure Rural Schools) program to provide compensation to counties, highway districts, and schools with tax exempt national forest lands.
Counties and highway districts can only use SRS funds for road and bridge maintenance and operations.
Schools can use SRS for general maintenance and operations.Slide37Slide38
Issues with Federal Land Payments
Federal land payment programs are subject Congressional reauthorization and Congress has been unwilling to identify or commit to long-term funding sources.
SRS payments are declining an average of 10% a year.
Full funding of PILT expired on September 30, 2014. If Congress fails to take action, payments may be reduced by up to 50%.
Payments under the SRS program expired on September 30, 2014. If SRS payments are not reauthorized the program goes away, and counties and schools receive a 25% payment in its place. This amounts to 95% less than the comparable SRS payment, meaning less money for roads and schools.Slide39
Final Thoughts
Local governments in Idaho play a key role in developing local communities and the economy of the State of Idaho.The quality of Idaho’s educational system matters in training Idaho’s workforce of the future.
The capacity and quality of local government infrastructure matters in meeting the needs of existing Idaho businesses and in recruiting new businesses to Idaho.
Failure to address deficiencies in Idaho’s educational and public works infrastructure systems will impact Idaho’s economy of the future.
Let’s work together to help grow Idaho.Slide40
Contact Information
Seth GriggExecutive DirectorAssociation of Idaho Cities
(208) 344-8594
sgrigg@idahocities.org
www.idahocities.org