Charges

State and Local Backgrounders Homepage

Charges include tuition paid to a state university, payments to a public hospital, tolls on highways, sewerage and parking meter fees collected by a city, and other public payments connected with specific government services. (Census excludes utility charges from these totals and reports them in their own category).

Although individual charges can be as little as a few dollars, in aggregate charges provide a substantial amount of revenue for state and local governments. This is especially true in states that collect relatively little tax revenue.

How much revenue do state and local governments raise from charges?

State and local governments collected a combined $498 billion in revenue from charges in 2016, or 17 percent of general revenue. As a group, charges accounted for nearly as much revenue as property taxes and more revenue than general sales taxes and individual income taxes.

Sources of State and Local General Revenue

Charges are a large source of revenue for both states and local governments. State governments collected $209 billion (11 percent of general revenue) from charges in 2016, and local governments collected $289 billion (18 percent of general revenue).

State and Local Revenue from Charges, 2016

 

Revenue ($ billions)

Percentage of general revenue

States and local government

$498

17%

States

$209

11%

Local governments

$289

18%

Which charges generate the most revenue?

Among the $498 billion in revenue state and local government collected from charges in 2016, the largest contributors were hospital fees (charges collected from patients, private insurance companies, and public insurance programs such as Medicare), higher education payments (mostly tuition), sewerage fees, higher education receipts (money spent on dormitories, athletic contests, books, and other commercial activities), and air transportation (hangar rentals and landing fees).

State governments collected the most revenue from higher education charges, hospitals, and highways (including both reimbursement for repairs and fees from toll roads). Local governments collected the most revenue from hospitals, sewerage, air transportation, solid waste management (fees for garbage and recycling collection and disposal), and parks and recreation (fees from swimming pools as well as camping areas). For more information on the different types of charges, see the US Census Bureau’s classification manual page.

Charges that Generated the Most Revenue, 2016

 

Revenue ($ billions)

Percentage of general revenue

State and local government (total)

$498

17%

1. Hospitals

$151

5%

2. Higher education—tuition

$85

3%

3. Sewerage

$56

2%

4. Higher education—receipts from sales
e.g., dormitories, bookstores, athletics)

$27

1%

5. Air Transportation

$23

1%

States (total)

$209

11%

1. Higher education—tuition

$78

4%

2. Hospitals

$64

3%

3. Higher education—receipts from sales
(e.g., dormitories, bookstores, athletics)

$26

1%

4. Highways

$10

1%

5. Natural resources

$3

<1%

Local governments

$289

18%

1. Hospitals

$88

5%

2. Sewerage

$55

3%

3. Air transportation

$21

1%

4. Solid waste management

$17

1%

5. Packs and recreation

$9

1%

Which states are most reliant on revenue from charges?

Among the 50 states in 2016, charges as a percentage of state and local general revenue ranged from 8 percent in Connecticut to 29 percent in South Carolina. Charges were 6 percent of general revenue in the District of Columbia. Including South Carolina, charges accounted for 20 percent or more of state and local general revenue in 13 states. Connecticut was the only state where charges accounted for less than 10 percent of state and local revenue. The next lowest totals were in Massachusetts, New York, and Rhode Island, where charges were 11 percent of state and local revenue in each state.

Data: View and download each state's general revenue by source as a percentage of general revenue

Interactive data tools

State and Local Finance Initiative Data Query System

Further reading

Tuition and State Appropriations
Sandy Baum, Michael McPherson, Breno Braga, and Sarah Minton (2018)

Ferguson city finances: not the new normal
Tracy Gordon (2015)

Notes

All revenue data are from the US Census Bureau’s Annual Survey of State Government Tax Collections.  All dates in sections about revenue reference the fiscal year unless stated otherwise.

The Census of Governments’s measure of general charges includes the following categories: air transportation, education (e.g., school lunches, athletic contest tickets, college tuition), highways and toll roads, hospitals, housing and community development, natural resources, parking, parks and recreation, sewerage, waste management, water transportation, miscellaneous commerce activity, and all other “not elsewhere classified.”