State and Local Government Revenues in Maryland and Surrounding Jurisdictions

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1 State and Local Government Revenues in and Surrounding Jurisdictions Presentation to the Economic Development and Business Climate Commission Department of Legislative Services Office of Policy Analysis Annapolis, July 22, 2015

2 State and Local Government Revenues and Surrounding Jurisdictions stands out as a state that relies more on taxes than nontax sources for its revenue. Almost 58% of State and local government revenue comes from tax sources, compared to the national average of just over 50% has a lower reliance on taxes than because of a much higher use of charges (including transportation revenues) and miscellaneous revenues (including gambling) The and West have a lower reliance on taxes than primarily due to a higher reliance on federal revenues The distribution of revenues in and is not very different from s. Both states rely less on taxes and federal revenues (slightly less on federal revenues in ) but more on charges and miscellaneous revenues 1

3 State and Local Revenues Revenues by Type as a Percentage of Total Revenues Intergovt. from Fed. Taxes Charges and Utilities (1) Miscellaneous (2) Total Revenues Percent 21.9% 57.5% 13.9% 6.7% 100.0% Rank Percent 20.5% 45.5% 20.3% 13.8% 100.0% Rank Percent 28.5% 48.7% 13.9% 8.9% 100.0% Rank Percent 21.7% 52.8% 17.8% 7.7% 100.0% Rank Percent 16.9% 52.1% 21.6% 9.4% 100.0% Rank West Percent 28.8% 45.0% 16.1% 10.1% 100.0% Rank U.S. Average 21.2% 50.3% 21.0% 7.5% 100.0% (1) Charges include higher education tuition, fees and auxiliary revenues, public hospital revenues, sewer and trash collection fees, highway tolls, and other user charges and fees. Utilities includes the gross receipts of publicly owned utilities (water, gas, electric, and transit). (2) Miscellaneous revenues include interest earnings, net lottery revenues, liquor store revenues, rents, royalties, fines and forfeitures, special assessments, sale of property, and other. Note: For the rankings, 1 indicates the highest and 51 the lowest. 2

4 State and Local Government Tax Revenues and Surrounding Jurisdictions Relative to the other jurisdictions, s reliance on the personal income tax is high, mostly reflecting the statewide local income tax relies less on property and sales taxes and more on the corporate income tax and license fees than does not impose a general sales tax but does impose business and occupational license taxes on the gross receipts of most businesses relies slightly more on sales and corporate taxes and somewhat less on the individual income tax than With the exception of the local income tax and the property tax, the overall mix of taxes in is somewhat similar to the mix in The relies less on the personal income tax than, but relies more on property taxes and corporate taxes West has a lower reliance on personal income taxes and property taxes than but relies more on the sales tax 3

5 State and Local Tax Revenues Tax Revenues by Type as a Percentage of Total Tax Revenues Property Tax Personal Income Tax Corporate Income Tax Sales & Selective Taxes (1) License Fees Other Taxes (2) All Taxes Percent 26.7% 38.0% 2.9% 26.3% 3.1% 3.1% 100.0% Rank Percent 16.6% 29.8% 6.4% 12.0% 30.0% 5.3% 100.0% Rank Percent 31.6% 25.1% 7.9% 25.9% 1.9% 7.6% 100.0% Rank Percent 29.9% 25.1% 3.8% 32.2% 5.8% 3.2% 100.0% Rank Percent 34.2% 30.8% 2.5% 25.1% 5.5% 2.0% 100.0% Rank West Percent 20.3% 24.9% 2.7% 38.0% 4.6% 9.5% 100.0% Rank U.S. Average 32.1% 22.1% 3.5% 34.3% 5.0% 2.9% 100.0% (1) Includes the general sales tax along with selective taxes such as excise taxes on alcohol and tobacco products, motor fuel taxes, titling taxes, admissions and amusement taxes, insurance premiums taxes, public utility gross receipts taxes, and others. (2) Includes death and gift taxes, documentary and stock transfer taxes, severance taxes, and other taxes. Note: For the rankings, 1 indicates the highest. Rankings are out of 51 except for the personal income tax (out of 44) and the corporate income tax (out of 47). 4

6 State and Local Tax Revenues Tax Revenues Per Capita Property Tax Personal Income Tax Corporate Income Tax Sales & Selective Taxes (1) License Fees Other Taxes (2) All Taxes Amount $1,368 $1,948 $149 $1,347 $158 $157 $5,127 Rank Amount $759 $1,362 $292 $551 $1,371 $242 $4,576 Rank Amount $2,957 $2,347 $734 $2,424 $177 $705 $9,344 Rank Amount $1,337 $1,121 $168 $1,439 $257 $145 $4,466 Rank Amount $1,384 $1,247 $102 $1,015 $222 $79 $4,049 Rank West Amount $773 $946 $104 $1,446 $174 $362 $3,804 Rank U.S. Average $1,420 $978 $156 $1,517 $221 $127 $4,419 (1) Includes the general sales tax along with selective taxes such as excise taxes on alcohol and tobacco products, motor fuel taxes, titling taxes, admissions and amusement taxes, insurance premiums taxes, public utility gross receipts taxes, and others. (2) Includes death and gift taxes, documentary and stock transfer taxes, severance taxes, and other taxes. Note: For the rankings, 1 indicates the highest. Rankings are out of 51 except for the personal income tax (out of 44) and the corporate income tax (out of 47). 5

7 State and Local Tax Revenues Tax Revenues as a Percentage of Personal Income Property Personal Corporate Sales & Selective License Other All Tax Income Tax Income Tax Taxes (1) Fees Taxes (2) Taxes Percent 2.6% 3.6% 0.3% 2.5% 0.3% 0.3% 9.6% Rank Percent 1.7% 3.1% 0.7% 1.3% 3.1% 0.5% 10.4% Rank Percent 3.9% 3.1% 1.0% 3.2% 0.2% 0.9% 12.3% Rank Percent 2.9% 2.5% 0.4% 3.2% 0.6% 0.3% 9.8% Rank Percent 2.8% 2.6% 0.2% 2.1% 0.5% 0.2% 8.3% Rank West Percent 2.2% 2.7% 0.3% 4.1% 0.5% 1.0% 10.8% Rank U.S. Average 3.2% 2.2% 0.4% 3.4% 0.5% 0.3% 10.0% (1) Includes the general sales tax along with selective taxes such as excise taxes on alcohol and tobacco products, motor fuel taxes, titling taxes, admissions and amusement taxes, insurance premiums taxes, public utility gross receipts taxes, and others. (2) Includes death and gift taxes, documentary and stock transfer taxes, severance taxes, and other taxes. Note: For the rankings, 1 indicates the highest. Rankings are out of 51 except for the personal income tax (out of 44) and the corporate income tax (out of 47). 6

8 Local Government Tax Revenues and Surrounding Jurisdictions The use of the personal income tax at the local level sets apart from other jurisdictions, as ranks first in its reliance on the personal income tax As a consequence of using the personal income tax as a major source of revenues, local governments in rely much less on property and sales taxes With the exception of the, local governments in s surrounding jurisdictions have a greater reliance on the property tax, with,, and West all higher than the national average In and, there is some reliance on the personal income tax at the local level local governments rely more on local sales taxes, with just over 16% of their revenue coming from the sales tax 7

9 Local Tax Revenues Tax Revenues by Type as a Percentage of Total Tax Revenues Property Personal Corporate Sales & Selective License Other All Tax Income Tax Income Tax Taxes (1) Fees Taxes (2) Taxes Percent 55.7% 33.3% 0.0% 5.8% 1.5% 3.7% 100.0% Rank 45 1 n/a Percent 82.0% 6.6% 0.6% 1.6% 3.1% 6.1% 100.0% Rank Percent 31.6% 25.1% 7.9% 25.9% 1.9% 7.6% 100.0% Rank Percent 70.7% 17.5% 1.3% 5.1% 2.6% 2.8% 100.0% Rank Percent 75.2% 0.0% 0.0% 16.3% 6.9% 1.5% 100.0% Rank 29 n.a. n.a West Percent 80.5% 0.0% 0.0% 7.0% 10.4% 2.1% 100.0% Rank 19 n/a n/a U.S. Average 73.5% 4.5% 1.2% 16.6% 2.6% 1.5% 100.0% (1) Includes the general sales tax along with selective taxes such as excise taxes on alcohol and tobacco products, motor fuel taxes, titling taxes, admissions and amusement taxes, insurance premiums taxes, public utility gross receipts taxes, and others. (2) Includes death and gift taxes, documentary and stock transfer taxes, severance taxes, and other taxes. Note: For the rankings, 1 indicates the highest. Rankings are out of 51 except for the personal income tax (out of 14), the corporate income tax (out of 8) and sales taxes (out of 49). The is classified as a local government in the Census data. If the rank is "n/a.", the state does not have that tax. 8