Law & Legal & Attorney Tax Law

What Is the Purpose of Property Taxes?

    County

    • The County Treasurer typically keeps a portion of the property tax revenues in a general County fund. The County uses the money to pay for general operating expenses, including administration, purchasing and maintaining County property, and providing utility services within the County.

    Cities and Towns

    • Cities and towns also receive a portion of the property tax that you pay. Cities and towns generally operate from two main sources of revenue, including property taxes and local sales and use taxes. Most cities and towns rely heavily on property tax revenues, and the sales tax revenues are considered fluff. Therefore, property taxes pay for city and town administration, utilities, property purchasing and maintenance, and more. For example, many cities and towns provide police services and fire protection services, and most of those services are funded with property tax revenues.

    Education

    • In most states, the majority of property tax revenues end up in the hands of the public school district that operates in your area. School districts rely almost entirely on property tax revenues to finance the day to day operations of the school district, including paying for administration salaries and benefits, teachers and coaches salaries and benefits, and purchasing and maintaining school facilities.

    Other Districts

    • A small portion of your property tax payment will end up in the funds of the various local and special service districts that operate in your area. Many people, for example, purchase their culinary water from a local water district, and the water district often relies, at least in part, on property tax revenues to fund the district operations. The property tax revenues are in addition to the service and usage fees that the district may charge. Other local districts include mosquito abatement districts, electric utility districts, water conservancy districts, sewage districts, or fire service districts.

    State Education

    • In some states, property tax revenues provide a partial subsidy for state educational programs, including secondary education and higher education. The property taxes end up in a state fund and from there get distributed to the various educational agencies operating within the state, such as local school districts, community colleges, state colleges and state universities.

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