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Wren (1995) presents the following criteria which may be used to evaluate

potential revenue sources:

  • Equity:

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.

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