Final answer:
City and county revenue primarily comes from property taxes, sales taxes, and federal government revenue, influencing annexation decisions to expand the tax base and impacting extraterritorial jurisdiction activities. These revenue choices reflect cultural and policy differences unique to each state and locality.
Step-by-step explanation:
The primary sources of city and county revenue are typically property taxes, sales taxes, and revenue from the federal government. Additionally, local governments may collect other taxes such as personal and corporate income taxes, and impose fees and charges for various services. The reliance on these sources impacts annexation decisions, as cities may seek to annex areas that provide a substantial tax base or where city services can be efficiently extended.
Annexation allows a city to expand its taxpayer base by incorporating adjacent land areas, which in turn can increase its property and sales tax revenues. It can impact extraterritorial jurisdiction (ETJ) activities, as cities may look to control and regulate development on their outskirts to protect their potential revenue base. These revenue sources and ETJ activities are influenced by state and local government authority, which is guided by cultural differences and policy matters between the states.
Local economies directly benefit from state and local spending, evidenced by services such as public education, transportation, and safety services. In cases where local governments’ revenues are insufficient to cover expenditures, they may have to adjust tax rates, reduce services, or find alternative revenue sources. Balanced budget amendments are policies that require governments to balance their spending with their income, reinforcing fiscal responsibility.