Appendix F: Overheads
From Facilitator's Guide for
Teaching "Taxes: Where Does the Money Go? Federal, State and Local
Government"
by Scott Loveridge, Liz Templin, Carole Yoho,
and Nancy Lenhart.
The following pages contain all tables and figures presented in
Taxes: Where Does the Money Go?
This series should be helpful to:
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Citizens interested in learning about the tax system;
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Government officials who explain the tax system;
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People interested in government or tax reform;
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Journalists writing about public finances;
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People who feel they pay too much property tax.
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A World Without Taxes—Tax Basics:
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Why taxes?
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Why federal, state, and local taxes differ
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Overview of the functions of government
Federal, State, and Local Linkages:
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Flow of tax dollars between levels of government
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Some units spend more than they collect
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Others spend less than they collect
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Perceptions of value of services received per tax dollar
Steps for Calculating Property Taxes:
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How property taxes are calculated in Minnesota
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Information on how to reduce your property taxes.
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Taxes for Small Governments
Income?
Purchases?
Imports/Exports?
Heads?
Property?
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Can Hide It
Can Travel
Administration Difficult
Unfair to Poor
Yes
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Table 1.
Where Do Tax Dollars Go?
Back to Text
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Largest Expenditure Category
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Federal
State
Counties
Cities
Townships
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Social Security/Medicare
Education
Human services
Public safety and streets
Roads/bridges
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Source: U.S. Bureau of the Census,
Government Finances 1990-91,
Series GF-91-5, USGPO, Washington, D.C. Forthcoming.
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Figure 1.
Percentage of State and Local Government
General Expenditure by Function, Minnesota FY 1990-91Back to Text
Figure 2.
Minnesota State and Local Government Expenditure
per Person Adjusted for Inflation and Unadjusted
Back to Text
Table 2.
Taxes as a Percentage of National Income Selected Countries, 1989
Back to Text
Sweden
Denmark
Netherlands
Norway
Belgium
France
Luxembourg
Austria
New Zealand
Finland
Germany
Italy
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56.1
49.9
46.0
45.5
44.3
43.8
42.4
41.0
40.3
38.1
38.1
37.8
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Ireland
United Kingdom
Canada
Portugal
Spain
Iceland
Greece
Switzerland
Japan
Australia
United States
Turkey*
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37.6
36.5
35.3
35.1
34.4
33.8
33.2
31.8
30.6
30.1
30.1
29.0
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Source: Advisory Commission on Intergovernmental Relations,
Significant Features of Fiscal Federalism,
Vol. 2,
Revenues and Expenditures,
p. 22, September 1992. (National Income is Gross Domestic Product—see Definitions.)
*With income per person about $1,300 per year, Turkey is quite a bit poorer than any other OECD nation. Turkey receives aid and development assistance from the rest of the OECD nations.
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Table 3. State and Local Tax Collections as a Percentage of Income in the United States and Selected States—Fiscal Year 1990
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Total
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Property
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General
Sales
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Individual
Income
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Corporate
Income
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Other
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United States
Minnesota
Wisconsin
Iowa
Michigan
North Dakota
South Dakota
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11.5
13.0
12.6
11.6
11.8
11.0
10.0
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3.6
4.0
4.4
4.1
4.7
3.3
4.0
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2.8
2.4
2.5
2.2
2.0
2.7
3.3
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2.4
3.7
3.2
2.8
2.6
1.2
0.0
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0.5
0.6
0.5
0.4
1.1
0.5
0.3
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2.2
2.2
1.9
2.1
1.4
3.6
2.4
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Source: Advisory Commission on Intergovernmental Relations,
Significant Features of Fiscal Federalism,
Vol. 2,
Revenues and Expenditures,
pp. 160-61, September 1992.
Notes: (1) "Other" includes selective sales and gross receipts taxes. (Gross receipts are defined as total sales before accounting for expenses.) (2) "Income" here is personal income—wages, interest earnings, and transfers received by individuals.
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Three Reasons for Intergovernmental Aid
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Poor areas may not be able to afford to pay
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Benefits of the service may extend beyond the district
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Match taxing and service delivery preferences
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Figure 3.
Flow of General Revenue Funds for Minnesota—
State and Local Governments 1990-91 by Level of Government
Back to Text
Figure 4.
Local Government General Revenue Sources—
Minnesota, 1990-91
Back to Text
Federal Aid to State and Local Governments Has Been Declining:
1978-78:
1990-91:
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22% of state and local revenues
17% of state and local revenues
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Table 4.
Major Local Government Functions
by Type of Unit
Back to Text
Counties
Human services
Highways
Public safety
Health
Election administration
Property tax administration
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Townships
Roads and bridges
Fire protection
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School Districts
K-12 education
Community education
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Cities
Sanitation
Streets and highways
Public safety (police/fire)
Housing/economic development
Recreation and parks
Libraries
Public service enterprises
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Special Districts
Housing and redevelopment
Soil and water conservation
Mosquito control
Waste management
Hospital districts
and many others
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Note on cities' public service enterprises: water and sewer systems are common public service enterprises in Minnesota, although a wide variety of other services are also provided through this mechanism. These operations are intended to be self-sustaining through fees and charges to users or consumers of the service or activity.
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Steps for Calculating Your Property Taxes
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Assess the Property
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Classify the Property
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Prepare Local Budget
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Overlapping Governments
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Figure 5.
Allocation of Minnesota Property Tax Dollar Levies—Payable in 1991
Back to Text
Produced by Communication and Educational Technology Services, University of
Minnesota Extension.
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