With limited resources and limitless expectations from your citizens, every dollar in your local government budget counts. Yet, without a proper strategy for generating revenue and allocating the funds, your locality will be unable to afford large-scale projects and underdeliver to your community-members.
Luckily, there are modern solutions for collecting revenue for your local government and data collection techniques for making informed decisions around where funds are coming from and being implemented across departments.
Follow along for everything you need to know about local government revenue generation and insight into how technology can help to collect funds and properly allocate your municipal or county budget.
Why is Revenue Generation Critical to the Success of Local Governments?
Your local government relies on countless streams of revenue to raise funds, from tax revenue to fee and fine collection and beyond. This money is utilized across departments to build and maintain infrastructure and assets, recruit government employees by paying reasonable salaries, provide enticing government benefits, manage citizen services, etc.
Failure to collect this municipal income and expand on your revenue generation techniques means that your local government won’t have the required budgets to implement critical components of your strategic plans across departments.
Tips for Generating Local Government Revenue
There are obvious ways that income is generated for local governments, like property and sales taxes. There may be other strategic opportunities to generate revenue beyond the typical ways that your local government might not be taking advantage of.
To maximize your local government budgets, consider the following revenue collection tactics:
1. Prioritize Local Economic Development
Obviously, more businesses opening up in your community equates to more collected tax revenue. Your economic development department can consider the following strategies for drumming up local business:
- Encourage commercial property construction: more commercial storefronts equates to more businesses opening up and more dollars being spent in your community. More residential properties means more citizens to spend at local businesses. Online permitting submissions and approvals and mobile inspections can expedite the construction process rapidly.
- Improve local broadband Internet infrastructure to entice businesses, entrepreneurs, and remote workers to work (and pay taxes!) within your jurisdiction. Make a digital transformation by moving business registration, permitting, zoning, and other business-related processes onto your government website.
- Increase pedestrian zones and bike lane access: increased accessibility for all citizens in your community means more opportunity to go to local stores and spend. Prioritize urban planning in your government strategic plan.
How Can Governments Encourage Local Economic Development? Here are more in-depth tips.
2. Fees for Applications, Document Requests, & More
Your local government is dealing with thousands of applications for various permits, licenses, open records requests, business registration, and other business and citizen services. Charging a fee, even one in the few dollar range, per application and document request can generate thousands of dollars to boost departmental budgets each year.
Permitting and licensing software can make fee collection simple. Learn more about How Permitting Software Works.
3. Online Fee & Fine Collection
Charging fees for applications and document requests as well as collecting tax revenue and utilities charges is straightforward with online fee and fine processing. Just as you add a credit or debit card to your Amazon account, citizens and businesses can make payments to your government online with GovPilot’s credit card processing integrations.
4. Online Real Estate Auctions
Trenton, NJ collected $4.15 million at the height of the pandemic by hosting an online government real-estate auction. The local government also strategically required commercial and residential property purchasers alike to commit to actively using the property themselves for 5 years at least, revitalizing inactive properties and land spaces while guaranteeing continued revenue collection in the community.
Consider a similar approach for properties and plots of land currently in your government's possession with GovPilot’s free of charge virtual real estate auction platform. Learn more from the Trenton, NJ Government Property Auction Case Study.
5. Issue Municipal Bonds
Municipal bonds are an enticing opportunity for investors due to tax incentives and low risk. If your municipality's bond rating is in good shape, consider issuing your own to generate revenue to be used for building and maintaining local infrastructure.
6. Prioritize Ordinance Enforcement
Generating revenue from local ordinance violations like illegal parking, barking dogs, etc. can generate revenue from un-abiding citizens and discourage inappropriate behavior that has a negative impact on the local community. Fees can be paid directly from code enforcement software on a government mobile field device or from your government website.
Learn more about the key components of a Modern Local Code Enforcement Strategy.
7. Have Pay to Park Requirements
Neighborhoods have a serious opportunity to generate municipal revenue via parking by:
- Requiring people parking on busy streets to pay a fee based on the amount of time they are parking their car.
- Using parking software to allow citizens to purchase parking permits directly from your government website
- Issuing tickets for parking violations and accepting fine payments online. Parking software can be used for digitally handling appeals as well.
8. Encourage Population Growth
Secondary and tertiary cities as well as rural areas have seen a large spike in population growth in recent years, especially as remote workers during and post-pandemic continue to seek less expensive alternatives to major cities.
Consider both physical infrastructure improvements like modern public transit and parks as well as digital infrastructure like high-speed Internet and government software to keep citizens happy and encourage more people to pick your neighborhood.
How Should Local Governments Manage Population Growth? Here’s the key aspects to consider.
How Can Local Governments Maximize Their Budgets?
Making every dollar count is just as important to the success of your local government as generating revenue. Unfortunately, far too many government projects cost more and take longer than anticipated.
Here are key ways to make your government budget count:
1. Automate with Government Technology
Using software across government departments can save time and money. Tedious administrative tasks can be automated via robotic process automation and let your government officials focus on more important tasks.
GovPilot government management software has over 125 solutions for every local government department to automate tasks, offer online forms, track accounting assets and liabilities, and collect fines and fees.
2. Leverage Federal and State Grants & Laws
The federal government recognizes the need for local governments to upgrade their local infrastructure and embrace digitization. Recent legislation like the Infrastructure Investments and Jobs Act offers federal grants for cybersecurity infrastructure, physical infrastructure, high-speed Internet, and more for local governments to utilize for various projects.
Both federal and state laws encourage local governments to generate revenue. New Jersey, for example, allows municipalities to charge fees for online permit applications in their NJ Electronic Permit Law and collection of state required certificate of liability insurance registration.
3. Collect Insightful Data
Storing government data in the cloud allows you to see real-time information about where government funds are coming in and being spent. Tangible data around revenue and government project costs and timelines are helpful for making informed decisions at both a department-level and city management-level.
Learn more about the Benefits of the Local Government Cloud and Using Data Analytics to Make Informed Government Decisions.
4. Encourage Resident Engagement
A key way to maximize your budget is to make sure you hear about the issues that matter most to your citizens and educate them on why your government is prioritizing specific projects. Public meetings allow for public discourse and public complaint software lets citizens send messages to your government about key issues in your neighborhood.
How Can Local Governments Run High-Quality Public Meetings? Consider these key tips.
Local Government Revenue Generation Strategy
Your local government needs to be proactive to generate revenue to use for important projects and processes. Include revenue generation as a key component in government strategic planning, and consider how online fee and fine processing, digital forms, and modern code enforcement can ensure growth in revenue.
To learn more about how GovPilot can help with revenue generation and budget allocation, book a free demo.
Local Government Sources of Information - FAQs
What is Government Revenue Generation?
Government revenue generation is the strategy used to generate cash to be utilized by government entities to fund projects and day-to-day government operations. Common revenue collection tactics include tax collection, code enforcement, application fees, bond issuance, utility fees, and prioritizing economic development.
Why Do Local Governments Need to Prioritize Revenue Collection?
More revenue equals larger budgets for your local government. If your local government is not prioritizing opportunities to generate additional revenue, you will fail to get infrastructure projects completed and offer the best government services possible. The result will be unhappy citizens, low-quality infrastructure, and inefficient workflows as a result of a lower budget.
How Does Government Software Help With Revenue Generation?
Government software like GovPilot streamlines the revenue generation process by moving both forms and payment services to an online capacity. Permits, licenses, open record requests, etc. can all be filed online. You can also accept debit and credit cards from your government website for collection of fees and fines for things like taxes, code violations, utility fees, and application administrative fees.
How Can Local Governments Utilize Their Budgets Effectively?
If your revenue generation strategy is strong but you struggle to get projects done as cheaply as possible and on time, you need to focus on your local government budgeting strategy as well. Strategic planning is key to good revenue management by building accurate project timelines and costs and ensuring that government services function as efficiently as possible.
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- Basics of Municipal Bonds by Investopedia
- Bonds or Fixed Income Products by Investor.gov
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- Recent Data Suggests Rural America is Growing Again by UNH Carsey School
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