General Revenue

General Revenue State Government Local Government Public Finance Revenue Exclusion Taxation Budgeting
In state and local governments, 'General Revenue' refers to the total revenue received, excluding revenue from utilities, sales of alcoholic beverages, and insurance trusts.
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General Revenue

Definition

In the context of state and local governments, general revenue refers to all revenue received except for that derived from specific services. Specifically, it excludes:

  • Revenue from utilities: This includes income from government-owned utilities such as water, electricity, and gas.
  • Sales of alcoholic beverages: This pertains to income from government-monopolized alcoholic beverage sales.
  • Insurance trusts: Includes income from government-managed insurance programs, such as public employee retirement systems or unemployment compensation.

Examples

  1. Property Taxes: Revenue collected from property taxes goes into the general revenue fund.
  2. Sales Taxes: General sales taxes imposed by state or local governments are included in the general revenue.
  3. Income Taxes: Personal and corporate state income taxes contribute to general revenue.
  4. Fees and Fines: Revenue from parking fines, various license fees, and other service fees constitutes general revenue.

Frequently Asked Questions (FAQs)

Q1: What is the significance of general revenue?

A1: General revenue is critical as it constitutes the bulk of funding for general government operations, including public safety, education, and infrastructure maintenance.

Q2: How is general revenue different from special revenue?

A2: General revenue can be used for any governmental purpose not restricted by law, while special revenue is earmarked for specific purposes, such as road maintenance or school funding.

Q3: Can revenues from gasoline taxes be included in general revenue?

A3: It depends. If the gasoline tax revenue is earmarked for specific transportation projects, it typically wouldn’t be included in general revenue.

Q4: Do grants from federal government contribute to general revenue?

A4: Yes, general federal grants can contribute to general revenue unless they are designated for specific projects or purposes.

Q5: Why are utilities and sales of alcoholic beverages excluded from general revenue?

A5: These are considered enterprise-type activities, meant to be self-sustaining, and their revenue is usually dedicated to their operation or specific purposes.

  • Special Revenue: Funds collected that are restricted for specific activities or projects.
  • Enterprise Fund: A fund established for government-owned enterprises such as utilities, which operate similarly to private businesses.
  • Property Tax: A levy on property that the owner is required to pay and which contributes to general revenue.
  • Earmarking: Designating specific funds for particular purposes or projects.

Online References

  1. National Center for State Courts - Glossary of Terms
  2. U.S. Census Bureau - Government Finance Glossary
  3. Municipal Research and Services Center - General and Special Revenue Funds

Suggested Books for Further Studies

  1. “Public Finance and Public Policy” by Jonathan Gruber
    A comprehensive book covering various aspects of public finance including taxation, social insurance, and general revenue.

  2. “State and Local Public Finance” by Ronald C. Fisher
    This book offers an in-depth look into the financial operations of state and local governments.

  3. “Public Budgeting Systems” by Robert D. Lee Jr., Ronald W. Johnson, and Philip G. Joyce
    This text provides a detailed overview of budgeting processes and fiscal management in the public sector.

Fundamentals of General Revenue: Public Finance Basics Quiz

### What is excluded from general revenue in state and local governments? - [x] Revenue from utilities, sales of alcoholic beverages, and insurance trusts - [ ] Revenue from property taxes and sales taxes - [ ] Revenue from income taxes and lotteries - [ ] None of the above > **Explanation:** General revenue excludes revenue from utilities, sales of alcoholic beverages, and insurance trusts. ### Property taxes collected by state and local governments are included in which category? - [ ] Special Revenue - [x] General Revenue - [ ] Enterprise Fund - [ ] Restricted Fund > **Explanation:** Property taxes are a primary source of income for general revenue in state and local governments. ### Why are utility revenues excluded from general revenue? - [ ] They are too inconsistent to budget for - [x] They are considered enterprise activities and are typically self-sustaining - [ ] They are allocated entirely to social services - [ ] They are not tracked by the government > **Explanation:** Utility revenues are excluded from general revenue because they are generally enterprise activities, meant to be self-sustaining. ### What type of fund is used for specific government projects, separate from general revenue? - [x] Special Revenue Fund - [ ] General Fund - [ ] Trust Fund - [ ] Capital Fund > **Explanation:** Special revenue funds are used for specific projects and purposes, distinct from the general revenue fund. ### Can federal grants be part of general revenue? - [x] Yes, unless specifically earmarked for particular purposes - [ ] No, federal grants cannot be part of general revenue - [ ] Only if agreed by local government - [ ] Only in election years > **Explanation:** Federal grants can contribute to general revenue unless they are designated for specific projects. ### Which of the following is typically a major component of general revenue? - [ ] Insurance trust revenue - [x] Sales taxes - [ ] Utility revenue - [ ] Alcoholic beverage sales > **Explanation:** Sales taxes are typically a major component of general revenue for state and local governments. ### What aspect of revenue does 'earmarking' relate to? - [ ] Conversion of revenue to grants - [ ] Including utilities into general revenue - [x] Designating funds for specific purposes - [ ] Distributing surplus revenue proportionately > **Explanation:** Earmarking refers to the designation of funds for specific purposes or projects, excluding them from general revenue. ### Which type of revenue fund is used for government-owned businesses? - [ ] General Revenue Fund - [ ] Special Revenue Fund - [x] Enterprise Fund - [ ] Capital Reserve Fund > **Explanation:** Enterprise funds are used for government-owned businesses like utilities, distinguishing them from general revenue. ### Do fees and fines typically go into general revenue? - [x] Yes - [ ] No, they go into special revenue funds - [ ] Only in certain states - [ ] They are distributed to insurance trusts > **Explanation:** Fees and fines usually constitute part of the general revenue. ### What kind of revenue exclusions from general revenue signify that they are self-sustaining activities or enterprises? - [x] Utilities and alcoholic beverage sales revenue - [ ] Property taxes - [ ] Sales taxes - [ ] Federal grants > **Explanation:** Revenues from utilities and alcoholic beverage sales are excluded from general revenue as they are considered self-sustaining activities.

Thank you for exploring the concept of general revenue in state and local governments and participating in our educational quiz!

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