Despite Falling Revenue, Counties Aren't Raising Taxes

Just 15 percent have raised property tax rates. Instead, they're cutting services and cutting personnel.
by | March 7, 2011
 

Despite local governments' continued struggles with revenue shortfalls, the overwhelming majority of counties are not raising sales and property tax and instead are opting to reduce personnel costs and dip into savings.

The findings are based on a survey of 500 counties last month by the National Association of Counties. (View the full survey here)
 
While most local governments have been hit with declining revenue in light of the economic turn down, they aren't turning to traditional revenue-generating tools. Just 15 percent of the responding counties had increased their property tax rates in light of the struggles, and only 2 percent increased sales tax rates.
 
That's partially because nearly 60 percent of counties said states impose a cap on the property tax rates. But Jacqueline Byers, NACo's research director, told Governing that many counties haven't reached that cap. Instead, they either lack the political will to raise taxes or believe that, given the poor state of the economy, doing so would be a burden on residents.
 
Instead, counties are largely addressing revenue shortfalls by trying to reduce personnel costs. More than half the counties have instituted furloughs. Salary freezes, hiring freezes and restrictions on employee travel are also common. Fifty-three percent of respondents have fewer staff today than they did in the 2010 fiscal year.
 
Below: Steps counties are taking to address revenue short falls. Article continues after the graphic.

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