II. Revenue, Grants, Fees, and Taxes Generally

• Library: Municipal Law Deskbook (ABA) (2015 Ed.)

II. REVENUE, GRANTS, FEES, AND TAXES GENERALLY

"Revenue" usually refers to any money that a government receives. Local governments typically receive revenue from three sources: grants, fees, and taxes.

A. Grants

A grant is a transaction in which:

1. a public or private entity makes money available to a local government for a specified purpose;
2. the specified purpose is not providing goods, services, or other direct benefits to the grantor; and
3. the local government is not obligated to repay the money if it uses the money for the specified purpose.

The federal government makes many grants available to local governments. State governments and private entities may also make grants available to local governments. Practitioners should be aware that many grants come with significant, complex restrictions that may vary with each grant.

The legal issues that most frequently arise regarding grants to local governments relate to the power of the local government to comply with the terms of the grant and to borrow any money that may be required to comply with the grant. Because there are many different kinds of grants with many different kinds of restrictions, legal issues relating to compliance with particular grants are not discussed in this chapter.

B. Fees

A fee is a charge that a local government imposes in...