Service fees. 7 Other strategies, such as payment plans, can also reduce leakage and increase collections. 'ocal governments in, over a number of years. azA/u|,j[^#R"US&HwksN$} YVbh What is the TCJA repatriation tax and how does it work? 9. /Parent 2 0 R In addition, elected officials must strike a tricky balance between raising taxes and fees and maintaining public support. Even though what the local government had generated from internal and external sources have impacted the area to an extent, local government finance system i.e. Local government revenue comes from property, sales, and other taxes; charges and fees; and transfers from federal and state governments. xref China Constitution of Federal Republic of Nigeria (1999). Norton Francis and Frank Sammartino (2015). << /F2 21 0 R What are defined benefit retirement plans? << /CS /DeviceRGB (*(%8H8c- fd9@6_IjH9(3=DR1%? 3. Who would qualify for return-free filing? For example, the federal government sends K-12 education funds to state governments that then distribute the money to local governments. This preparatory work generally consists of collecting the relevant data and developing the current revenue baseline. hv-oRv9[Plq ?#o-.mOqi@}Fdl(d]i&y-tIT>=#'K/+EmKO+pe>"J*#9(tG_0Yb,UfR`En`o7So^ 0000000532 00000 n D?M5j$3X,/L )o-@ci"wAB%O3FQO ~3(,*Y| ?3efuj 6 6+?j|yDVQvKxzV. >Pu*wH:97CWW /F10 61 0 R %PDF-1.4 % ;nUG]~[ sp!@Q06"NY;k g],g>$6%E#w .CB}6{yghj9Kv:Q9w l+/;2w Agu (2010) examined the . These fines would promote environmentally responsible behavior as well as create a viable revenue stream for the city. What is foreign-derived intangible income and how is it taxed under the TCJA? Are the Social Security trust funds real? International Journal of Arts and Humanities Bahir Dar, Ethiopia, 2(3), S/No. /GS7 17 0 R The final 32 percent of state general revenue came from intergovernmental transfers. Journal of Economics and Sustainable Development, 7(8),113123. All major sources of revenue have grown in real dollars since 1977, with charges seeing the largest increase in percentage terms ($132 billion in 1977 to $575billion in 2019, or a 337 percent increase) and transfers seeing the largest increase in total dollars ($263 billion in 1977 to $762 billion in 2019, or a 189 percent increase). Chapter One of Revenue Generation in Local Government Areas (Problems and Prospects) INTRODUCTION: BACKGROUND OF THE STUDY: Nigeria has three- tiers of government systems, These are; (i) The federal government (ii) The state government and (iii) The local government. Download chapter PDF Introduction. The reforms #hich gave recognition to, the local level #ere ta$en care of. /Image87 74 0 R This effect is the strongest in mostly rural and sparsely populated areas where lignite is mined and used for power generation. How would small businesses be treated under a VAT? Cresthill Publishers Limited. To establish this dedicated unit, cities could create a cross-functional workforce with representatives from different departments, including finance, planning, property, legislation, and key municipalities. /S /Transparency /F2 21 0 R Los Angeles, for example, charges higher fees for expedited permitting and licensing processes. /Type /Group stream Taxes, fees, and user charges are considered "own-source" revenue. What is global intangible low-taxed income and how is it taxed under the TCJA? << How large are the tax expenditures for retirement saving? How do IRS audits affect low-income families? This unit has several responsibilities. /Font << US Census Bureau. Something went wrong. /F1 20 0 R <>>> How does the current system of international taxation work? In Nigeria, as in other developing countries, the debate on the nature and purpose of local government has been a long and at times better one. Regarding dissipation, figure 4 shows the time series power curtailment of an integrated generation plant without energy storage. % A., & Adewoye, J. O. [/ICCBased 14 0 R] The City of Chicago has instituted such a program several times over the past two decades. Since 1977, property taxes as a share of combined state and local general revenues have declined while charges have increased. Developing countries revenue growth is hampered by a . /MediaBox [0 0 595.32 842.04] 68% of the world population projected to live in urban areas, un.org. What tax incentives exist for higher education? >> >> /ProcSet [/PDF /Text /ImageB /ImageC /ImageI] Hb``$WR~|@T#2S/`M. /Type /Page The rapid urbanization of the worlds population is well under way. For example, cities could institute new charges for the disposal of food waste. /Resources << xo A>a#dkU(0 KJ@C2aOb4a&MoZ(K#YWa-SI{;E zubQ?$6 J&/oB50uvF>LO>Cw~N.1~,s%8#/A"akFu^6V07ST]hi/p4g8GtC? _X*O9H+CaB(ErQK]0K|d)F2t4a6ntHFcjdiD What policy reforms could simplify the tax code? Since residents often react negatively to actions that increase the cost of living, efforts to raise revenue through additional fees and taxes can be considered more acceptable when they also have a perceived public benefit. It is therefore recommended that these factors that affect administrative functions be addressed; staff salaries should be paid early; the little resources at hand should be utilized in building infrastructural facilities, and the constitutional laws and bye laws should be reviewed for proper understanding of local government autonomy, power and functions as the third tier of government. /StructParents 7 /Resources << >> /Kids [4 0 R 5 0 R 6 0 R 7 0 R 8 0 R 9 0 R 10 0 R 11 0 R 12 0 R 13 0 R] Local Government Finance and Implications for Development: A Case Study of the Ikorodu Government Area Lagos State. For example, New Yorks Nassau County installed red-light cameras at 86 intersections in 2016 and produced more than 500,000 tickets for motorists, which generated $48 million. x\KF+BGPpF^H bCfz(a11mGVV_faw1^o|mew5t'7=^$MDDRYTR7*::'W{o7/jBl\~?vM/ >> /Meta54 51 0 R /Contents 80 0 R 6 /ExtGState << 4. >> 3 <>stream The need for state and local governments to generate adequate revenue from internal sources has therefore become a matter of extreme urgency and importance. Do all people eligible for the EITC participate? /F4 23 0 R Meanwhile, revenue from sales taxes steadily increased from 5 percent to 7 percent between 1977 to 2017 (figure 2). /GS31 30 0 R How are different consumption taxes related? Transfers from the federal government have fluctuated considerably over the past three decades. What options would increase federal revenues? Municipalities raise revenues by charging for services such as public parking, toll roads, waste management, and building permits, among others. What would and would not be taxed under a VAT? 12 0 obj Taxes accounted for 42 percent of local general revenue in 2017. /Count 10 (2011). >> It is therefore suggested that the level of economic dependence on coal widely varies, and some, but not all, local governments will require financial assistance after the coal phase-out. /F7 42 0 R /Type /Group /F1 20 0 R The capacity of local government to generate revenue internally is one very crucial consideration for the creation of a local council. stream Theoretically the study was supported with the Efficiency and Development theories. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. /Tabs /S /Type /Group To address this problem, requires proper implementation of plans directed at enhancing adequate revenue generation. Abstract and Figures This paper examines trends in local government revenues and current challenges that local governments face in raising revenue. The challenge of local government financing in developing countries What is the size of the opportunity? /Group << Some are widely practiced, while others represent emerging and innovative options for city governments to pursue. Thus, the 'ocal government cannot embar$, execute, and possibly carryout the maintenance of these pro%ects and other responsibilities, This is the basic reason #hy development is s$eletal at some 'ocal -overnment, councils in Nigeria. >> Provided by the Springer Nature SharedIt content-sharing initiative, Over 10 million scientific documents at your fingertips, Not logged in /StructParents 6 endobj What are the sources of revenue for local governments? INTRODUCTION Nigeria is a sovereign nation. Cities should consider the following areas: Collectively, these assessments will help cities to produce a prioritized list of levers for implementation. >> In 2019, transfers from the federal government provided 22 percent of combined state and local general revenues. This need underscores the eagerness on the part of state and local governments and even the federal government to look for >> >> /Parent 2 0 R /Type /Page OECD fiscal decentralization database (object name Table 12: 1970 2016), OECD, accessed April 15, 2019, oecd.org. One of the MMDAs involved in the use of recent ICTs to assist revenue mobilization is the AMA. What is carried interest, and how is it taxed? >> Wendthat,incitieswherearelativelyhighershareofrevenueiscollectedthrough nes, fees, and asset forfeitures, violent crimes are cleared at a relatively lower rate, 3 << Therefore, the following three areas should be examined: In addition, the city should refer back to the results of the citizen sentiment survey conducted during the preparatory stage to help inform the assessment of social acceptance. When renegotiating existing leases, several levers can be utilized, such as increasing allowable floor-to-area ratio (FAR), collecting penalties for violations, amending contract duration and payment terms, and modifying plot use. How have the sources of revenue for state and local governments changed over time? /S /Transparency /CS /DeviceRGB 2018. Washington DC: Urban Institute. endobj In 2019, 4 percent of local government general revenue came directly from the federal government (e.g., federal funds for local transportation projects) and 31 percent came from state governments (the numbers do not sum to the total share from intergovernmental transfers because of rounding). Local governments collected $1.7 trillion of general revenue in 2017. 4 0 obj What would be the effect of a national retail sales tax on economic growth? 4. Two Decades in Effect: Volume-Based Waste Fee System in South Korea, Ministry of Environment, South Korea, January 2016. What is the history of the federal budget process? /Resources << /Group << /F6 41 0 R City of Los Angeles Department of Public Works, Bureau of Engineering standard fee list. >> /F7 42 0 R In our experience, cities that fare the best in their revenue generation efforts create an internal dedicated unit that is responsible for the strategys implementation. Who bears the burden of federal excise taxes? /Type /Page /XObject << Although local government revenue was about the same relative to gross domestic product in 1977 (8.6 percent) and 2017 (8.7 percent), it has fluctuated over the period (figure 3). /Image8 18 0 R International Journal of Economics, Commerce and Management, 3(6), pp. /Group << !ODL 2}PE^eF}6m 0|A h%D|k[ /Image8 18 0 R US Department of Commerce, Bureau of Economic Analysis. xb```b``a`24(!" . In the last 10 years, Illinois has reduced the portion of income tax returned to cities and towns. What are Opportunity Zones and how do they work? V)gB0iW8#8w8_QQj@&A)/g>'K t;\ $FZUn(4T%)0C&Zi8bxEB;PAom?W= Similarly, London has instituted a congestion charge that drivers must pay when traveling within the city center. Municipalities could increase service fees (such as those on parking and construction permits) as well as fines, taxes, and the cost of accessing city assets (such as beaches). What did the Presidents Advisory Panel on Federal Tax Reform say about the national retail sales tax? endobj How does the tax system subsidize child care expenses? endobj Through leases, joint ventures, and joint development agreements, municipalities can generate additional income. /Meta53 50 0 R Tax is a compulsory levy imposed by government on individuals and companies, for the various legitimate function of the state (, Tax is a necessary ingredient for civili"ation. Census of Governments, vol. Lucy Dadayan and Kim Rueben (2021), More Than Fines and Fees: Incorporating Equity into City Revenue Strategies 0v=.7&YP ?SfqZBEFowu8-RmHaav,Ax5dT# Arabian Journal of Business and Management Review (Nigerian Chapter), 1(10), 2435. https://www.grin.com/document/293498. Intergovernmental transfers accounted for 36 percent of local general revenue in 2017 (figure 1). The study concludes that local government finance has a great impact on development as it is a major factor in getting adequate financial resources and has become a problem because of political inference in local government affairs. /Image85 72 0 R What are the consequences of the new US international tax system? What are the economic effects of the Tax Cuts and Jobs Act? How does the federal government spend its money? /Type /Group >> 1 0 obj What is the difference between carryover basis and a step-up in basis? 0000003592 00000 n >> What is the TCJA base erosion and anti-abuse tax and how does it work? general sales taxes and gross receipts taxes, Coronavirus Response and Relief Supplemental Appropriations Act, federal funds for local transportation projects, Surveying State Leaders on the State of State Taxes, More Than Fines and Fees: Incorporating Equity into City Revenue Strategies, State and Local Government Revenues and Racial Disparities, Assessing Fiscal Capacities of States: A Representative Revenue SystemRepresentative Expenditure System Approach, Fiscal Year 2012, Governing with Tight Budgets; Long Term Trends in State Finances, Center on Labor, Human Services, and Population, Metropolitan Housing and Communities Policy Center, 8 percent from selective sales taxes on purchases such as, 2 percent from selective sales taxes on purchases such as, 3 percent from other taxes such as a locality'staxes onhotel bookingsandrestaurant meals. How does the deduction for state and local taxes work? How receptive citizens and businesses are to a given intervention in a revenue stream can have significant impact on the interventions long-term viability. How does the tax system affect US competitiveness? In Los Angeles, for instance, developers can obtain an expedited engineering permit for a surcharge of 40 percent of the permits cost. How large are individual income tax incentives for charitable giving? 4 This exercise involves analyzing the citys revenue baseline to determine current revenue generation across all streams and then comparing revenue streams against benchmarks for peer cities to identify any gaps. Since 1977, the share of local general revenue from taxes has remained steady at about 40 percent. As such, federal transfers as a share of local general revenue will likely look different for these yearsbut Census has not yet published that data. /Meta63 59 0 R 3. endobj /MediaBox [0 0 595.32 842.04] Financial management in Nigerian local government. 2 0 obj 0000003920 00000 n (&. 2 /Group << In general, cities draw from four types of sources that each include numerous levers (Exhibit 2). 9 o"A\|h9MxgZ(wpMk UN==dN#R. /Tabs /S Sales taxes (general and selective) provided local governments $124 billion (7 percent of general revenue) and individual income taxes accounted for $33 billion (2 percent). /F2 83 0 R Emerging countries and regions will see the greatest increase in their urban populations, and China, India, and Nigeria represent slightly more than a third of the projected growth in that time frame. /GS7 17 0 R Eneanya, A. N. (2012). 1 0 obj Who benefits from the deduction for charitable contributions? Indeed, each citys situation is inherently different and will require a unique combination of interventions and careful consideration to ensure the program is both economically and politically feasible. Small businesses . /StructParents 3 What is the breakdown of revenues among federal, state, and local governments? This intervention is typically applicable to any paper-based transactions or services, such as business license fees, construction permit fees, or land registration fees. /Font << HyTSwoc [5laQIBHADED2mtFOE.c}088GNg9w '0 Jb /Type /Group What have budget trends been over the short and long term? /XObject << /Meta64 58 0 R Cameron Amos and Jesper Lindqvist, Finlands fine example, The Australia Institute, January 2016, tai.org.au. r_ w=[,()l9"] JETfKIXpEq)h5-B(3+r;&uJ_=~_9=0 A review of revenue generation in Nigeria local government: A case study of Ekiti State. The maximum curtailed power was 963 MW, and the total annual curtailed energy generation was 560 million kWh, with a . 11. revenue generation still remains poor due to local government being unable to exploit revenue areas because of the interference of State Government in local government affairs. /Contents 43 0 R >> 11 0 obj Economic development in the Third World (12th ed.). For example, revenue KPIs could include the annual increase in revenue per lever, while nonrevenue KPIs could define targets for each lever and its corresponding interventions, such as the annual increase in the number of violations detected. /Length 5747 To meet rising expectations for service delivery amid tight budgets, municipal governments must increase revenues from existing sources as well as create new revenue streams. << stream 8. share. (*(%8H8c- fd9@6_IjH9(3=DR1%? Keywords: Local Government, Federalism, Revenue Allocation and Fiscal Federalism 1. Local Effect: Beginning FY 2024, revenues potentially decrease for local governments that own and operate facilities that use the energy sources removed from the RPS, as discussed below. Revenue generation is the main source of income to the Federal, State and local Governments. 1. Revenue from property, sales, and other taxes totaled $707 billion, or 42 percent of general revenue. 2 0 obj (All sources of local government general revenue do not sum to 100 percent because of rounding.) 7 At the same time, most states place restrictions on local property taxation, with limits that fall into three main types: rate limits, assessment limits, and levy limits. >> What are tax expenditures and how are they structured? 5356 11 What is the difference between refundable and nonrefundable credits? How do flexible spending accounts for health care expenses work? PubMedGoogle Scholar, Insitute of African Studies, Carleton University, Ottawa, Canada, 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG, Ntiwunka, G., Ayodele, T.M. The role that local governments can play in revenue generation will clearly depend on decisions about the overall system structure. << Google Scholar. /Meta56 45 0 R Financing Local Governments: Exploiting the potential of local revenue Introduction Local governments are constitutionally empowered to control, regulate and also raise revenues from activities in their jurisdiction. <>stream endobj Aravind Boddupalli, Tracy Gordon, and Lourdes German (2021), State and Local Government Revenues and Racial Disparities Despite the numerous options available to generate more funding for city operations, elected officials must proceed carefully. . /ProcSet [/PDF /Text /ImageB /ImageC /ImageI] In Saudi Arabia, the Ministry of Municipal and Rural Affairs has a control unit that monitors the performance of regions and the regional government authorities that oversee municipalities. /F5 40 0 R How does the tax exclusion for employer-sponsored health insurance work? >> The usual practice in this country (Nigeria) is that political parties and individual candidates often make Randall, Megan, Tracy Gordon, Solomon Greene, and Erin Huffer. Alao, D. O., & Alao, E. M. (2013). To serve as an intermediary between government at the center and local communities. 4 0 obj What types of federal grants are made to state and local governments and how do they work? Cities could also revise their pricing models by using differentiating factors specific to each revenue lever. How would various proposals affect incentives for charitable giving? In our experience, governments that pursue a practical approach to revenue generation can capture up to 50 percent of incremental revenues. Local governments include county governments, municipalities, townships, special districts (such as water and sewage authorities), and school districts. >> \~x2{w6HZpV1 ~eh5u*d*pn1gs9WzfY+W)hh,O`\`k}[rHyU ;18HXS-xep]#2 jAI740-+-=tk3zdSzn*Qv8tC>"mTv{ 4X[w*qQ*@TLHYF\MQZjxU^VQqy hiJdNVhP Mq:=oD5QyU!WwH^_/6+_Gwg_vSLVe` -WL=:@N>X9VfEhlfN~ <=-y3e,KQ!CH[jy^{eTuyt\p\)?rj;7K80r;@66Auu:fdYfJ LG8D6 %$5 /F1 20 0 R Candice Ferrette and Robert Brodsky, Red-light camera revenues jump in Nassau County, Newsday, June 10, 2018, newsday.com. What are the options for taxing wealth transfers? n effective 'ocal -overnment system rests ma%orly on the availability of human, governments development. <> Sarah Jindra, Chicagos ticket amnesty program begins today, WGN9, November 10, 2015, wgntv.com. trailer 1 0 obj revenue generation and the development of the rural areas using Ikorodu local government in Lagos Nigeria. The revenue systems of these governments eroded while the workloads and scope on the expenditure side of the state and local system budget . 4 0 obj What are dynamic scoring and dynamic analysis? In so doing, they impose some taxes and rates on these economic activities as a way of generating funds for their Once cities have identified their field of options, they must consider several questions before jumping into implementation: Which streams and interventions can generate the most revenues with a limited impact on stakeholders? In 2013, Seoul introduced a volume-based food waste disposal charge that succeeded in reducing its daily food waste significantly. /Type /Page 10 0 obj Would tax evasion and avoidance be a significant problem for a national retail sales tax? The finding revealed that there is an average relationship between local government finance and development as other factors like proper utilization and administrative competence are necessary in development. How does the earned income tax credit affect poor families? 0 Rakson Nigeria Ltd. Okotoni, O. Next, cities should perform a thorough gap analysis to define the potential revenue impact for any given stream. The research instruments used for data collection were questionnaire and interview. )U!$5X3/9 ($5j%V*'&*r" (,!!0b;C2( I8/ >> Fines. What is the Highway Trust Fund, and how is it financed? >> Today, the LGDF receives only 6.06% of total personal income tax the state receives, a reduction . What are inversions, and how will TCJA affect them? Governments should ensure that fee levels cover the costs of services being provided in the majority of cases. /MediaBox [0 0 595.32 842.04] >> >> =s`Eu00Fu@dH*e&PtD\ \ v B#L2]\m Elected officials have four primary revenue sources, each containing multiple levers. It is as easy to achieve fiscal decentralization under a unitary system of government as under a federal system. Since development demands a lot of capital, this study will critically analyze the relationship between local government finance system i.e. The State's own budgetary issues have put a major strain on local government budgets across Illinois. /Meta41 36 0 R How Could We Improve the Federal Tax System? In 2020 and 2021, Congress transferred a large amount of funds to local governments as part of the CARES Act, the Coronavirus Response and Relief Supplemental Appropriations Act (part of the December 2020 omnibus bill), and the American Rescue Plan. How did the Tax Cuts and Jobs Act change personal taxes? In 2020 and 2021, Congress transferred a large amount of funds to state governments as part of the CARES Act, the Coronavirus Response and Relief Supplemental Appropriations Act (part of the December 2020 omnibus bill), and the American Rescue Plan. Miscellaneous sources, such as special assessments, provided 7 percent of state general revenue. Fajobi, O. F. (2010). /Type /Group 68% of the world population projected to live in urban areas by 2050, says UN, United Nations Department of Economic and Social Affairs, May 16, 2018, un.org. It operates a federal system of government that is, . One strategy that cities have followed is introducing an amnesty program for delinquent parking tickets that waives penalties and additional fines as an incentive for motorists to pay up. /Meta62 60 0 R >> /F1 20 0 R What is return-free filing and how would it work? Local governments collected $1.7 trillion of general revenue in 2017. /CS /DeviceRGB << /Filter /FlateDecode How does the federal budget process work? 2023 Springer Nature Switzerland AG. The data was analyzed using simple percentage and frequency for primary data and content analysis for secondary data. How do phaseouts of tax provisions affect taxpayers? 10 0 obj Accessed 18 July 2016. 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