What are intergovernmental revenues? Provide two examples relevant to states.

What are intergovernmental revenues? Provide two examples relevant to states.

• A. Revenues received from other government units; e.g., federal grants and state aid to local governments.
• B. Taxes collected by a government from its own residents.
• C. User fees charged by a government to individuals.
• D. Interest earnings from investments.

Answer: (A)

Intergovernmental revenues are funds a government receives from other government units rather than from its own taxpayers or charges for services. For states, two common examples are federal grants to the state government (for programs like Medicaid or transportation projects) and state aid passed through to local governments (cities and counties) to support local services such as education or public safety. These revenues come from outside the state's own tax base and fees, meeting the definition of intergovernmental. In contrast, taxes collected from residents, user fees paid by individuals, or earnings from investments are not intergovernmental revenues.

Intergovernmental revenues are funds a government receives from other government units rather than from its own taxpayers or charges for services. For states, two common examples are federal grants to the state government (for programs like Medicaid or transportation projects) and state aid passed through to local governments (cities and counties) to support local services such as education or public safety. These revenues come from outside the state's own tax base and fees, meeting the definition of intergovernmental. In contrast, taxes collected from residents, user fees paid by individuals, or earnings from investments are not intergovernmental revenues.