Departments Finance Where does Trinidad get their Money?
Where does Trinidad get their Money? PDF Print E-mail

Cities pave our streets, fight crime, prepare us for disaster, bring water to our taps, take our trash away, build and maintain our infrastructure - the list goes on and on.  These services cost money.  Trinidad's General Fund revenue is made up of the following sources:

Sales Tax

Sales taxes are a leading source of city revenue.  The revenue can be used for any purpose other than payment of debt.  The Texas comptroller, who "rebates" the city share on a monthly basis, performs collection of sales taxes.  The comptroller retains a small portion of the city tax revenue to cover the state's administrative costs.

Property Taxes

Property taxes are equal to sales taxes as a leading source of city revenue.  Though crucial to city budgets, city property taxes make up just a fraction of a property owner's total property tax bill.  Most cities under a population of 5,000 have statutory authority to levy property taxes at a rate of up to $1.50 per $100 of assessed value.  City property tax levies are tied by law to fluctuating property tax values.  As values increase, the city must adjust its rate or face potential rollback elections.  In reality, such tax rollback elections are rare.  City rates have held relatively steady for years, both in terms of actual rates and in terms of total levy as adjusted for inflation and rising income.

Franchises

When utilities and other industries use city property to distribute their services, cities are permitted by law to collect rental fees, also known as "franchise" fees, for the use of public property.  Franchise fees are calculated by various methods, depending on industry type.

Permits and Fees

Cities may collect fees for issuing permits for building construction, environmental regulation, and for other services.  Because cities incur costs to regulate in these areas, the permit fees must be tied to the cost of providing the service.

Court Fines

A city that operates a municipal court may impose fines for violations of traffic laws and city ordinances.  Maximum fines typically range from $200 for traffic violations, up to $2,000 for city ordinance violations relating to health and safety.  Much of a city's fine revenue offsets the costs of law enforcement and operation of the municipal court system.

DID YOU KNOW?

Many people mistakenly believe that cities derive substantial general revenue from their courts.  In reality, the first $82 of most traffic tickets goes directly to the state.  What's left over, if any, can be used by the city.  Unfortunately, city courts are increasingly being used as a backdoor revenue source for the state.

Interest Earnings

When a city invests its funds, it must closely follow the mandates of the Public Funds Investment Act.  Because of the twin concerns of safety and liquidity, investment income is a relatively small source of city revenue.

Transfers from Other Funds

Many cities operate utilities and other optional services that generate substantial gross revenues.  By law, the fees for such services must closely offset the cost of providing the service.  In addition to the cost factor, cities are permitted to retain a reasonable "return", which can then be transferred to the general fund.  This return amounts to less than six percent of overall city revenue.

Other Sources

City revenue can take various other forms, including user fees for some services.