Where Does the Money Come From to Support Cities?

Let’s do a quick analysis of the money.  I’m using the initial revenue estimates for the City of Brookhaven as an illustration (estimates by the Carl Vinson Institute of the University of Georgia). These numbers aren’t exactly the way they turned out for Brookhaven, and the actual numbers won’t be the same from year to year.  But these figures will at least give a perspective on the financing of cities.

Brookhaven’s revenue estimate (CVI):

·         Real Property taxes                        $10,000,000         35%

·         HOST sales tax                                     5,000,000         18%

·         Utility Franchise fees                           3,300,000         12%

·         Insurance premium tax                       2,300,000           8%

·         Fines                                                       2,000,000           7%

·         Storm Water Fund                               1,500,000           5%

·         Occupation Taxes                                 1,100,000           4%

·         Community Development Funds          800,000           3%

·         Hotel/Motel taxes                                   530,000           2%

·         Beverage Taxes                                        500,000           2%

·         Personal Property Tax                             430,000           2%

·         Motor Vehicle tax                                    350,000           1%

·         Confiscated property                               250,000           1%

·         General Business License                        200,000           1%

·         Liquor License                                           160,000           1%

·         Everything else                                            80,000           0%

Grand Total                                                       $28,500,000       

A quick summary of the Brookhaven estimates:

• Real Estate Property taxes are about 35%;
• HOST sales tax and franchise fees total about 30%;
• Various business taxes are another 20%;
• Everything else is 15%.

Almost all of that money was being collected before the creation of Brookhaven; but was going somewhere else.

There is a business tax on all insurance premiums in GA. The occupation tax is a county/ city tax that goes to cities in incorporated areas. Community Development funds are state grants. Fines cover a lot of sins, including traffic violations. Storm Water fees are paid by all real estate owners. Hotel/Motel taxes are paid by people staying at those facilities; typically those are short-term visitors. Liquor taxes and licenses are paid by the store and the liquor distributor. All of these items were previously being collected, but were being distributed somewhere else.

Community Development funds are a state block grant, subject to rationale other than population, need or usefulness. Personal property tax is based on inventory, furniture and fixtures, which is obviously only a factor in businesses. None of those are paid by individuals; but all of them were previously being collected and distributed somewhere else.

Brookhaven may not be a close parallel to Briarcliff in totals, but it will be close in the basic distribution. And the taxes for Briarcliff are also already being collected, and are being spent somewhere else.