Wren (1995) presents the following criteria which may be used to evaluate
potential revenue sources:
How fair is the tax or fee based on the ability to pay as a
percentage of total income? This generally depends on whether or not
the tax or fee is discretionary on the part of the payer.
Efficiency: Evaluated on three planes: Can the tax or fee be collected efficiently? Does the tax or fee obviously connect to the services being supported? If the purpose is to modify behavior or gain control in addition to generating revenue, how well is that objective met?
Elasticity: Does the revenue source expand (and contract) with the economy or with inflation?
Wren’s evaluation of alternative funding sources, using the above criteria, is
shown in Table 4 (1995, p.4).
A list of alternative funding sources available to the Harrison Township Fire
Department appears in Appendix A. These sources are divided into two categories: Tax
based and Non-tax based.
In lieu of increasing taxes, government officials have turned their attention to non-
tax funding alternatives. Non-tax funding alternatives consist primarily of user fees.
Since the mid-1970’s user fees have become so popular that three-quarters of local
governments have adopted one form or another (Berman, 1997). Guidelines to be used to
assist in evaluating, or when considering the creation and adoption of, user charges and
fees appear in Appendix B.