Revenue is the money collected by governments. Government cannot provide services we expect without money to pay employees, hire contractors, build facilities and infrastructure, and make payments to people in need. Since state and local governments cannot operate at a deficit (spending more than they take in), the decisions we make about how to collect money have a direct effect on what public services we get. They also affect who shares in the effort of providing public service and how economic decisions are made. This section describes the taxes and other revenue sources of Oklahoma's governments.

State and local governments rely on a wide range of revenues to finance services. When we think of government revenue we usually think of taxes, but they are far from the only important revenue. Services that benefit all citizens are financed at least partly from taxes. Most services, though, generate other revenue sources, like federal funds, insurance trust revenues for retirement and insurance systems, fees or user charges, and utility charges. Each government and each service is financed differently. The mix of revenue depends on service demands, citizens' desired level of taxes, and whether governments provide services that can be funded through federal grants, user charges, or other generated revenue. The mix of revenue changes over time based on dozens of policy decisions we make each year.

Overall, state government collected  $18.7 billion in 2008, while local governments collected $12.4 billion. The figure includes  over $4 billion in state and federal aid that the state passes on to local governments, mainly for education.

This graph shows the importance of different revenue sources to Oklahoma state and local governments. Both levels of government use a number of different revenue sources, though local governments are more dependent on taxes, user charges, and utilities.

• Taxes are the largest source of revenue for state government and second for local governments. The state collected $8.3 billion in taxes and local governments raised $4.0 billion in 2008.
• Federal funds are important to both levels of government, with the state receiving over $5 billion and local governments about $4 billion.
• State and local governments collected $4.2 billion in user charges-fees paid by people and businesses who benefit directly from a service-in 2008.
• Insurance trusts, which collect payments for unemployment insurance, workers compensation, and employee retirement systems, are an important source to state government, which collected nearly $400 million for this purpose. Local insurance trusts are limited to retirement systems, which collected less than $100 million in 2008.
• Utility revenues are charges to customers of water, electric, gas, and public transit systems. They are somewhat more important to local governments, which use these fees to pay all costs of the utility and often to help fund other public services. Oklahoma governments collected $1.4 billion from this source in 2008.
• Other revenues include interest, sale of property, fines, and various licenses and permits. These generated nearly $1.7 billion for the state government and about $800 million for local governments in 2008.

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