Where the Money Comes From

Texas has 254 counties—more than any other state. Each of these can generate its own revenue through taxation, fees and fines, and service charges. Revenue collected from taxpayers in a given county helps to pay for county courts and jails, parks and recreation, health and human services, and roads and bridges.

The majority of revenue collected at the county level is put into a ”general fund,” which consists of revenue from property taxes, sales taxes, charges for services, grants and contributions, and other miscellaneous funds. Other county governmental funds include special funds dedicated to major projects or debt payments.

Major sources of county revenue: Taxes

Local property taxes typically make up the largest proportion of county revenue. Sales taxes, levied by some county governments, also make up another significant revenue source.

Property Tax
As the largest source of county revenue, property taxes typically account for about half of a county’s total revenue. Local property taxes are based on the taxable value of residential and commercial property.

According to the Texas Comptroller of Public Accounts’ Annual Property Tax Report, in 2008, Texas’ county governments levied $6.3 billion in total property taxes. Since 1989, county property tax levies have increased an average of 6.8 percent per year.

Local Sales Tax
Sales and use taxes generally provide 10 percent to 20 percent of a county’s total revenue. Local sales and use taxes on goods and services can be imposed by counties, but local sales and use taxes are capped by state law at a combined rate of 2 percent. County sales tax rates range from 0.5 percent to 1 percent, depending on the priorities set forth by local communities.

In 2009, total county sales and use tax remittances amounted to $366.3 million.

Charges for Services

County governments derive between 10 percent and 20 percent of their total revenue by charging for particular services, or user fees.

Other
Other county revenue sources, besides property and sales taxes, include fees and fines, monies collected from issuing permits, and intergovernmental transfers.