SALES TAX LIMITS. Twenty-six (26) states set a local-options sales tax limit. Most often, the local-option sales tax limit is around 1.5 percent. Only three states, Ala., Alaska and Mo., do not restrict county local- option sales tax rates. Counties and boroughs in Alaska and Mo. must receive voter approval before the local-option sales tax takes effect, but counties in Ala. may institute the tax without voter approval. Few counties may exceed the sales tax cap with special authority. For example, counties in N.Y. may petition the state legislature to go above the 3 percent sales tax rate approved by the state before putting the proposed sales tax rate to popular vote.16
(See Map 5).
These many layers of limitations on county revenue authority hamper counties’ ability to service their communities. These state limitations force counties to prioritize spending in a manner often at odds with the community priorities, particularly when combined with unfunded mandates. Counties may be put in a difficult position to reduce or eliminate a program, because of insufficient revenue. These limitations hinder county elected officials and voters from engaging in self-governance.
2
COUNTIES ARE COPING WITH MORE STATE AND FEDERAL MANDATES, NOT FULLY COVERED BY STATE AND FEDERAL AID.
Many county services are mandated by the states or the federal government, such as the administration of elections. In some states, counties are responsible for childhood education or even a portion of the community college costs. However, federal and state governments increasingly fail to provide counties with funds sufficient to cover the costs for mandated county services. Fifty-nine (59) percent of counties recorded dedicated grants covering a smaller percentage of county expenses between 2007 and 2013.17 When state and federal government funding for mandates diminishes, counties are forced to cover the shortfall with general revenues and user fees.
Key Terms Used in this Study
ADMINISTRATION SERVICES: Includes general governmental staff, services and functions such as county commissioners; treasurers; auditors; county clerks; councils; tax assessors, collectors; record and deed preservation; as well as financial and legislative departments. This category excludes functions that are specific to other categories such as courts (Justice and Public Safety); education and school boards (Education); and public works (Other); but otherwise encompasses all other central, legislative and executive activities and staff of the local county government.
DARK STORE METHOD: Valuation for property tax assessment purposes which assesses the value of currently operating “big-box” retail store locations as if they were vacant and closed.
HEALTH AND HUMAN SERVICES: Includes services related to healthcare (hospitals; mental health services; services for the physically disabled; indigent care; nursing, assisted living homes); veteran’s aid and services; pest, rodent, animal and weed control; animal shelters; environmental protection and improvement for purposes of public health; air pollution; welfare services; and child care and support.
MANDATE: Services, functions, or processes required of county governments by instruction from state or federal government authority. Funding to fulfill these mandates may be either funded or unfunded by the imposing authority.
NATIONAL ASSOCIATION of COUNTIES | NOVEMBER 2016 COUNTY LINES, SPRING 2017
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