Where Do Our Tax Dollars Go?

How Cities Are Solving the #1 Question Residents Ask About Their Money

In 2025, one question still dominates public meetings, inboxes, and comment threads: "Where do my tax dollars go?"

For residents, it’s not just curiosity. It’s about trust. People want to know that their contributions (property, income, and sales taxes) aren’t disappearing into a black hole of bureaucracy. They want transparency, clarity, and proof that public spending supports public good.

But most city budgets? Hundreds of pages. Dense. Technical. And let’s be honest, almost unreadable to the average person. So how are some communities breaking through that complexity? By showing, not telling.

What Works: Turning Complex Budgets into Tangible Stories

Case in Point: Shakopee, MN

Challenge

Residents didn’t understand why city services cost what they did. Traditional communications weren’t sticking.

Solution

Shakopee launched a digital Taxpayer Receipt showing how much each household contributes to services like police, snow removal, and parks. But they didn’t stop there. They promoted it with a humorous video comparing quirky Minnesota habits to the simplicity of seeing where your money goes.

Results

• Over 22,000 video views
• Positive community feedback
• Residents saw, for example, that snow removal costs just $14/year on a $350,000 home
• Big win for trust and engagement

“We wanted people to appreciate what they get for their money. The receipt made that real.” — Shakopee Communications Team

Case in Point: Hartford, CT

Back in 2015, Hartford pioneered interactive budgeting with the country’s first digital “People’s Budget.” The result? Residents could directly adjust budget items, understand trade-offs, and see how their dollars were spent. It was a game-changer and helped launch a nationwide movement for participatory budgeting.

“Balancing Act is just the tool we need to fully engage our residents in the hard choices that need to be made with our budget.” — Hartford City Official

The Misconception Gap

Most residents vastly overestimate what government services cost. Without clear information:

• They think schools eat half the budget (they don’t).
• They think staff salaries dominate spending (rarely the case).
• They don't see the value of services they don’t use daily (like stormwater management).

But when cities break down the numbers clearly, especially in personalized, interactive formats, perceptions change.

What You Can Do Right Now

Even if you’re not ready to launch a full platform, here are 3 practical steps to help residents understand where their taxes go:

Publish a Digital Taxpayer Receipt

Use tools like Polco’s Taxpayer Receipt to create a personalized breakdown of spending by service. Residents enter basic data (like property value or income), and instantly see how their taxes fund services.

Visualize Service Value

Show comparisons like:

• $22/year = library services
• $14/year = snow removal
• $89/year = fire protection
  This turns abstract dollars into visible, relatable services.

Tell Micro-Stories Behind the Numbers

Pair your receipt or charts with simple resident-facing stories. “Because of your contribution, we were able to fix 82 streetlights and expand youth programs to 500 more kids this year.”

Why It Matters Now More Than Ever

With budget shortfalls, rising costs, and public skepticism, local governments can’t afford to stay silent or confusing. Residents expect transparency, and they deserve it.

The good news? Tools now exist to make that transparency not only possible, but engaging.

We Reviewed Dozens of Use Cases. Here’s the Bottom Line:

When communities explain where tax dollars go in a personal, interactive, and even playful way:

• Trust goes up
• Complaints go down
• And conversations shift from “Why are you wasting money?” to “How can I help solve this?”

You don’t need to overhaul your whole budget process. You just need to help people see what they’re already paying for, and why it matters.