The nature of governmental services is such that the difference between individual tax burden and individual benefit from government’s services can be significant - some pay more in taxes than they receive in services and some pay less. What occurs at the individual level can be aggregated to geographic areas to measure the average net costs and benefits that are received by the residents of a region. This analysis examines the degree to which this phenomenon occurs within local governmental units within Ingham County. Twenty-three local government jurisdictions (cities, townships and villages) were used to mark the geographic areas from which revenues are collected and services are provided. The analysis reveals the following results:

1.    Net per capita payments compare estimated tax revenues from all sources (property taxes, fees for services, and intergovernmental payments financed by income taxes) with budgeted costs of county services. Various indicators, such as population, rates of poverty, and reported crime, are used to estimate the degree of county services received by the residents of a municipality. When examined from the perspective of a municipality’s average resident, the individual net annual payment for county services ranges from ($131) to $166, a spread of $297 annually, or $.81 per day.

2.    A positive net per capita payment indicates that the residents’ tax payments exceed the cost of the services provided, as estimated by factors such as population, rates of poverty, and reported crime. Net per capita payments tend to be positive where there are relatively high income and property value levels combined with relatively low rates of poverty and reported crimes. In eight municipalities, which contain 37% of the county’s population, the average resident’s net per capita payments are positive, ranging from $10 annually to $166 annually.

3.    A negative net per capita payment indicates that the estimated cost for county services provided exceeds the average resident’s tax payments. Net per capita payments tend to be negative where there are relatively low income and property value levels combined with relatively high rates of poverty and reported crimes. In sixteen municipalities, which contain 63% of the county’s population, the average resident’s net payment is negative, ranging from ($9) to ($131).

4.    Using only residential property taxes on a municipality by municipality basis, the average resident’s net tax payment for county services ranges from ($114) to ($416), a spread of $302 annually, or $.83 per day. In this comparison, a net per capita payment is the difference between estimated residential property taxes including special millages and estimated cost of county services. The average resident in all 23 municipalities makes negative per capita payments, indicating that the estimated cost of the services provided tends to exceed the residential property tax payment.

5.    A second methodology (the ratio method) was conducted to verify the results. The ratio method divides the expenditures by the total revenues, total property taxes and residential property taxes to determine the proportion of services to payments. This method confirmed the majority of the model’s results.

6.    Fairly large County funding decisions would be needed to move the average resident’s net per capita payment from negative to positive or visa versa. Various scenarios depicting a movement of approximately $4 million between county services or to a property tax reduction or increase--an amount which is approximately 5% of the total budget used in the analysis--have a range of impacts on a municipality’s per capita payments. Only one of the four scenarios impacts the positive or negative status of the net payment. However, such scenarios can impact the amount of the net payment by a significant margin. Analysis of the scenarios indicates that outcomes are influenced more so by demographic features than by County policies.