Income sources for a county

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The three main sources of revenue are property tax, intergovernmental revenue and charges for services.

Intergovernmental revenue is money provided by federal or state governments to counties in order to pay for services mandated by federal or state law.

• Ad valorem taxes: A property tax on real and personal property. The amount of tax is based on the property’s assessed value and the applicable tax rate.
• Sales taxes: Counties can levy sales taxes on goods and services.
• Poll taxes: Counties can impose a poll tax to support public schools.

Trust funds

• Alabama Trust Fund (ATF): A permanent trust fund that receives revenue from offshore drilling rights and gas production royalties. Counties receive a payment from the ATF each April.
• Alabama County and Municipal Government Trust Fund: Counties receive a payment from this trust fund each April.

Bonds

• Counties can issue bonds to fund public building construction, purchase land and repay debt. The county commission can call an election to determine if bonds should be issued.

Other sources

• Tax-increment financing districts: Districts created by counties to benefit economically distressed areas.
• Coronavirus State and Local Fiscal Recovery Funds: Funds that can be used to support households, small businesses and other needs.
• Federal funds: The federal government sends funds directly to local entities in Alabama.

The wealth of a county in Alabama is determined by factors like median income, property value and investment income.

Factors that determine a county’s wealth:

• Median income: The average income of households in a county
• Median home value: The average value of homes in a county
• Investment income: The income generated from investments in a county, such as dividends and capital gains

There are only three Alabama counties where the median income tops that of the United States.

Shelby County posts the highest median income in the state at $70,879, more than $15,000 higher than the U.S. average of $55,775.

The next two counties, Madison County ($59,117) and Autauga ($56,580), come in just higher than the national average.

The rest of Alabama’s 64 counties all have a median income lower than the national average, according to federal figures.

Coosa County comes in around $36,078.

The biggest expenses for Alabama counties vary by county, but often include public safety, employee salaries and capital assets.

Property Tax: Counties may levy a property tax of up to 0.5 percent of the assessed value of the levied property.

Personal Property: Personal property may be assessed for property tax purposes.

Income Tax: Counties do not have the authority by state law to impose income taxes.

Sales Tax: Counties and municipalities may levy local sales taxes in addition to those levied by the state on a broad variety of goods and services; however, county authority may be limited.

Mineral Tax: Counties do not have the authority to impose a mineral tax, without legislative assistance.

Gas/Fuel Taxes: Counties and local municipalities are entitled to 55 percent of the funds raised from the state gas tax to be used for the purposes of county highway construction and maintenance.

Counties and municipalities may levy a sales tax on gasoline that must be applied to the total gross receipt of the transaction, minus the state gas tax.

Alcohol/Tobacco Taxes:

• Tobacco: County taxes on tobacco and the distributions of the revenue are administered by the state.
• Alcohol: County taxes on alcohol and the distributions of the revenue are administered by the state.

Debt and Debt Limit: Counties may issue and sell bonds to repay the floating debt, to fund public building construction and improvement, to purchase land for county parks, and for any other lawful purpose under general law.

The county commission may order an election be held to determine whether bonds may be issued and for what purpose. In the event of an unforeseen emergency, a county commission may issue its interest-bearing warrants in an amount sufficient to pay such emergency obligation.

Misc. Tax Info:

• Poll Tax: Counties may impose a poll tax to be used specifically for the support of public schools within the county.

 

Please send your questions or comments to bradleychuck92@gmail.com.