News Updates

Divergences in state revenue disbursements

To meet their residents’ needs, municipalities depend on a combination of local revenues such as property tax and state-generated revenues including income tax. Therefore, state tax structures and formulas for allocating revenues to municipalities affect their ability to fund basic services, meet community goals, and attract and retain residents and businesses. Each of the municipalities in the CMAP region receives a share of several state revenue sources, including the income tax, motor fuel tax (MFT), use tax, sales tax, and the personal property replacement tax (PPRT). The state disburses these revenues based on various factors, including population or other criteria long established in state statute.

This policy update analyzes the extent to which municipalities rely on any individual state revenue source, highlights factors that create differences between the revenues that communities receive, and suggests potential tax policy changes that can strengthen individual communities and the region.