DIFFERENCES IN RELIANCE ON USER CHARGES BY AMERICAN STATE AND LOCAL GOVERNMENTS

Reliance on user charges by American local governments has increased substantially since the early 1970s. Changes in the mix of expenditure are partly responsible, but the major cause has been increased user charge financing of specific functions. Differences in the mix of expenditure also partly explain the wide interstate differences in reliance on user charges, but a more important variable is personal income, negatively associated with user charge reliance. Another significant variable is the ability to export business taxes, which discourages user charges as would be expected.