Comparison of County Government Finances by Size Groupings

March 2017

County officers go through the General Fund budget process annually and decide how limited funds will be allocated among numerous county services. Budgeting can be a stressful process and county officials often search for guidelines and information that is helpful. A common practice is to compare one county to other counties of similar size (in terms of population and/or taxable value). Revenue and expenditure data for each county in Oklahoma is published annually by the Oklahoma Cooperative Extension Service.1 These data allow one-to-one county comparisons. However, little information has been published that examines county revenues and expenditures by size groups. This report provides a stratification of county revenues and expenditures by two size variables: (1) population and (2) net assessed (taxable) value. This information will aid comparison and contrast of counties, especially at budget time.

Stratification or dividing the state’s counties into size groups is necessary because of the wide range of population  and the economic and geographic diversity encountered across Oklahoma. Stratification by (1) population and (2) net assessed value is reasonably accomplished for all but three counties. Tulsa, Oklahoma and Cleveland Counties are by far the most populous and the wealthiest in terms of total assessed value. These distinctions make them unique in comparison to the other 74 counties. Because of the great difference, this report excludes Tulsa, Oklahoma and Cleveland Counties.

County Rankings

Table 1 ranks the remaining 74 counties in order of increasing population size. The 2015 assessed value (2016 Fiscal Year) is also shown in the table along with assessed value per capita. Table 2 ranks these 74 counties in order of increasing assessed value. Each county’s population and assessed value per capita is also presented. It is interesting to compare a county’s place in Table 1 with its place in Table 2. For example, Harmon County has the next to smallest population (Table 1) and the smallest net assessed value (Table 2). On the other hand, Cimarron County has the smallest population, but is listed seventh in Table 2. One could surmise from this that Harmon County has a relatively small number of people and a relatively small tax base. Cimarron County has relatively few people, but relatively more assessed value per person. Beaver County is even more pronounced in this regard. Beaver is ranked eighth smallest in population, but is ranked 33 in assessed value. Generally speaking, the greater the tax base (assessed value), the easier it is for county government services to be provided at adequate levels and quality to the citizens.

Table 1

Table 2

Since the ad valorem tax is so important in financing county government, counties with larger assessed valuations and valuation per capita can more easily finance county government services. Counties with smaller assessed values and smaller populations will tend to have a greater challenge in providing minimal levels of county services. Tables 3 through 6 support these assertions.

Table 3

Table 4

Table 5

Table 6


Stratification of counties was performed in such a way to have several counties in each group and to make the groups cover a reasonably similar range of population or assessed value. Four population groups were selected: (1) Group I – populations up to 10,000; (2) Group II – populations of 10,000 to 20,000; (3) Group III – populations of 20,000 to 45,000; and, (4) Group IV – populations of 45,000 to 135,000. For assessed value, five groups were selected; (1) Group I – assessed values of up to $60 million; (2) Group II – $60 to $110 million; (3) Group III – assessed values $110 to $175 million; (4) Group IV – $175 to $300 million; and, (5) Group V- $300 million to $1,300 million. Tables 3 through 10 show the average amounts of several revenue and expenditure categories for the 74 counties altogether and for each stratification grouping. Tables 3 and 4 contain the General Fund averages for all counties and for each of the population groups. Tables 5 and 6 contain the General Fund averages for each of the assessed value groups. Tables 7 through 10 represent the Highway and Cash Fund averages for all counties and for each population group. Tables 4, 6 and 10 provide per capita averages, while Table 8 provides per road mile averages.

Table 7

Table 8

Table 9

Table 10

General Fund by Population 

Average cash surplus (carry-over), revenue streams and expenditures for all 74 counties and for each of the four populations groups are shown in Table 3. Beginning cash surplus plus total revenue equals the total dollars available for financing county General Fund activities.  This is labeled Total Revenue and Cash Balance in Table 3. End-of-Year Cash Surplus and population averages are also included. Notice the average population of each group is roughly one-half of the next larger group.

It is important to note that “Total Revenue” and “Total Revenue and Cash Balance” do not necessarily represent all available dollars. Counties also have “Surplus Transferred,” an item made up largely of back taxes (delinquent taxes) paid during the current fiscal year. Counties do not usually budget these funds. Because items like delinquent taxes are not included in the table, “Total Revenue and Cash Balance” minus “Total Expenditures” does not equal “End of Year Cash Surplus.”  As expected, Table 3 shows that the larger the population of a county, the larger its county government is in terms of revenue and expenditures, generally speaking. Notice that the averages for “Counties* 74” (all 74 counties) are most similar to the averages in the 20,000 to 45,000 population group. For all groups, ad valorem revenues are clearly the greatest source of financing, varying from $925,948 for Group II to $4,642,872 for Group IV.

It is perhaps curious to observe the average revenue of Group I is larger than that of Group II.  Two factors help explain this relationship.  Several of the Group I counties had relatively large amounts of oil and gas industry activity in FY 2015.  This increases ad valorem taxes and sales taxes.  Secondly, more of the Group I counties choose to place their county sales tax collections in their county General Fund (as opposed to Cash Funds).

Before discussion of particular expenditure accounts, it is important for the reader to know that county governments in Oklahoma do not have a uniform set of accounts. Those listed in these tables are relatively uniform, yet differences exist.  Example one: some counties pay all insurance and benefits out of their “General Government” account, while others set up a separate “Insurance and Benefits” account.  Example two: some counties will have sales tax expenditure accounts in their General Fund and other counties will have sales tax expenditure funds in their “Cash Funds” (discussed later).  Therefore, for one county, in addition to the County Sheriff expenditures listed in Tables 3 and 4, there will be a Sales Tax Sheriff expenditure account that has been lumped into “Other Expenditures” in these tables.  In another county, there will be a Sales Tax for Sheriff Cash Fund (included in Tables 9 and 10).  State law allows each county to put sales tax into the General Fund or into a separate Cash Fund.  Because this is allowed, direct comparison of one county to another is complicated and difficult. To make such comparisons, the reader should also examine publications with county by county detail such as “Abstract of County Government General, Highway, and Special Revenue Funds in Oklahoma, Fiscal Year 2014 – 2015” and “County Sales, Use and Lodging Tax Summary Report, FY 2015.”  The authors are Lansford and Schieffer. These publications are available at under the “Related Publications” link.

For more discussion of Table 3, expenditure patterns are quite consistent across population groups. For example, county sheriff expenditures are consistently about 20 percent of expenditures for the groups, with the exception of Group II, where it drops to 15 percent. General government plus Insurance and Benefits compose 27 percent of expenditures (on average), varying from 22 percent in Group IV to 34 percent in Group II.  Reval/Visual Inspection is another relatively large account composing 7 percent on average and varying from 5  to 8 percent across the Groups.  Together, Sheriff, General Government, Insurance & Benefits, plus Visual Inspection are more than half (54 percent) of General Government expenditures for the average county.

The importance of stratifying county government expenditures and revenues becomes clear when examining Table 4. Revenues and expenditures per person are significantly larger in the smaller counties, especially Group I. Contrast the revenues per person in all counties (“Counties* 74”) with revenues per person in Group I. An average $158.21 in ad valorem taxes is paid by each person in counties with less than 10,000 people, versus an average $72.30 for all counties. An average $102.56 per person in county sales taxes are collected in Group I counties versus $19.41 per capita for all counties. Total revenue (largely taxes) per person in Group I ($373.02) is triple the aggregate average ($129.20). The same is true of total expenditures. These numbers suggest that either small counties collect and spend too much on county government or that there is a basic, fixed cost associated with providing a basic set of county services and small counties have fewer people to spread that cost among. Most likely, the latter explanation more truly describes the situation.

This phenomenon is called economies of size. Economies of size can be defined as a reduction in cost per person (average cost) because resources are used more intensively, that is, the same building, piece of office equipment, computer, and such can be used to serve more people. Another way of saying this is that a resource (such as a computer) is more fully utilized. Economies of size are exhibited because the amount of additional resources necessary for each additional person is smaller. For example, one sheriff patrol car costing $35,000 might serve the needs of a 6,000 person county, or the same car with just a little more maintenance might serve the needs of an 8,000 person county. Thus, the cost for the additional 2,000 people is much smaller per person.

General Fund by Assessed Value

Average revenues and expenditures of the five assessed value groups show that the larger the county (in terms of assessed value), the larger the revenues and expenditures (Table 5). Interestingly, Group II has one of the largest amounts of sales taxes. One may surmise that either sales tax rates are relatively large in these counties or that other counties place sales taxes in “cash funds” rather than in the General Fund.  In FY 2013, both occurred.  Most small counties placed some or all of their sales tax in the General Fund, while most of the larger counties placed their sales tax in cash funds.  At the same time, smaller counties had higher sales tax rates.  For example, in FY 2013 the average Group 1 county sales tax rate was 1.73 percent, while the average Group 4 sales tax was 0.99 percent.

Looking at expenditures, notice Group III General Government.  This large amount, relative to the others, is an anomaly.  Washita County made renovations to the courthouse, costing several million dollars.  This one-time, extraordinary expenditure helped make the average of $936,967 to be unusually large in comparison to the other groups. Similarly, Alfalfa County (also in Group III) had an unusually large expenditure in the “Insurance and Benefits” account line.  Excluding Alfalfa County from the average reduces the average from $572,561 to $345,291.  In all other line items, Washita and Alfalfa County expenditures are similar to the Group III averages.  Therefore, elimination of these two counties extraordinary “General Government” and “Insurance and Benefits” expenditures results in average expenditure in line with what would be expected in the size category.  Without Alfalfa and Washita Counties, the total expenditures for Group III would be about $2,900,000 rather than $3,626,266 as shown in Table 5.

Table 6 shows per capita revenues and expenditures by assessed value group.  There is great variation from group to group. Generally, Group II is in sharp contrast to the other groups in per capita revenue.  Similarly, Group III shows sharp contrast in terms of expenditure. The comparatively large expenditure per capita of Group III can largely be explained by the expenditures in Alfalfa and Washita counties, discussed above.  The relatively large revenue and expenditure average of Group II, especially as contrasted with Group I, may be harder to explain.

Looking again at Table 2 may help explain the revenue (and expenditure) contrast. The first 10 counties listed in Table 2 are the Group I counties.  The next 14 are the Group II counties. Generally, Group I counties are relatively small in both valuation and population.  By definition, Group II is larger, but looking at the “Assessed Value per Capita” column helps show the difference.  Group II has substantially more taxable value per capita.  The Group I average assessed value per capita is $7,602 whereas, Group II is $9,898. Next, look at the Group III counties in Table 2 (25th through 36th) and note the similarity of assessed value per capita between this group and Group II.  The Group III average is $9,904.

Generally speaking, expenditures per capita decline from Group II to Group V.  Focusing on the Sheriff account, expenditures decline from $37.24 to $21.89 per capita.  Several other accounts have a similar decline from smaller to larger counties.  This may indicate the economies of size mentioned earlier.  If General Government and Insurance & Benefits (which is appropriate) is added and the extraordinary Alfalfa and Washita County amounts is left out, $36.60, $33.81, $34.37, $33.47 and $24.69, respectively from Group I through Group V is found.  In summary, a fairly level expenditure per capita for Groups I through IV, then a smaller amount for Group V is found.

Finally, please note the change in “Cash Surplus” from beginning to end of year.  Cash Surplus may better be labeled Cash Fund Balance.  It is simply the amount of unencumbered money at a point in time.  The change in cash balance is found by taking beginning cash, adding revenues, then subtracting expenditures. The remainder is the ending cash balance.  Average cash balances of each group tend to stay around the same level over time. This is expected.

Highway Fund by Road Miles

Tables 7 and 8 represent the County Highway Fund Average Cash Balance, Revenues and Total Expenditures for 74 counties and by population group. While the General Fund and Cash Funds are presented showing averages per capita, the Highway Fund is presented as average dollars per road mile in Table 8.

At least two observations are made from the information in these tables.  First, Group II seems to be at a relative disadvantage compared to the other three groups.  Both the beginning cash balance and the revenues are lower in Group II.  The major recurring revenue sources – gross production, diesel, gasoline and motor vehicle license and registration  taxes are all smallest (on average) in Group II.  Smaller population (Group I) counties such as Alfalfa, Beaver, Blaine, Dewey, Ellis and Roger Mills have relatively large oil and gas production.  This boosts the average gross production tax revenue among the Group 1 counties.  Second, Group II has (on average) only 70 percent as many county road miles as Groups I, III and IV (Table 8).  The number of road miles is a major factor in the allocation of diesel, gasoline and motor vehicle taxes.  Population is another major factor, hence Groups III and IV get relatively larger shares of these taxes for this reason as well.

The size of Group 1 “Other Revenue” is also noteworthy.  Some counties place CBRI (County Bridge and Road Improvement) Fund money in the “Highway Fund” and others place them in a separate “Cash Fund.” It is possible that more of the Group I counties place these CBRI funds in their Highway Fund relative to the other size groups.  (Grants and FEMA funding can also be factors.)

Table 8 indicates that total revenue per certified mile of county road varies from $3,618 in Group II to $4,891 in Group IV.  The average is $4,073.  Expenditures tend to follow revenues, varying from $3,461 in Group II to $4,559 in Group IV.  Ending cash balance per mile does not change appreciably from beginning to end of year.

Cash Funds by Population

Average cash revenues and expenditures for all 74 counties and the four population groups are represented in Tables 9 and 10. When studying Table 9, it is apparent that average revenues and expenditures are directly correlated with population. Total Revenue ranges from $670,899 in Group I to $ $1,865,397 in Group IV, and total expenditures range from $693,668 in Group I to $1,764,112 in Group IV.  The only fund that does not follow correspondence to population is the Sheriff Department of Corrections Fund.  This is compensation paid to counties for state inmates kept in county jails.  Group I revenues are larger than Group II or III.  Interestingly, expenditures from this fund are largest in Group III.

Table 10 represents per capita group averages of revenues and expenditures by fund.  This shows an inverse relationship to population. Group I has the largest total revenue and expenditures at $110.82 and $114.59 per capita, respectively, and Group IV has the lowest at $26.99 and $25.52, respectively.  Sheriff Department of Corrections and Sheriff Service Fee are the dominant Cash Funds.

Summary and Conclusions

In the current economic and institutional environment in Oklahoma, county government in smaller counties (in terms of population and taxable value) collect and expend significantly larger amounts per capita to finance county General Fund and Cash Fund activities. Larger counties seem to benefit from economies of size in the provision of county government services. Counties depend most heavily on ad valorem (property) and sales taxes.  Citizens vote on local sales taxes, so it is assumed that they are willing to pay the price to maintain a certain set of county government services.  Highway funding depends on formulas for allocation of state taxes and amounts per mile of road are similar across size groups.


Notie H. Lansford
Extension Economist

Elizabeth Addcox
Graduate Student Assistant

Caitlin Baney
Undergraduate Student Assistant

DASNR Extension Research CASNR
OCES  Contact
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Oklahoma State University
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