CPFO Budgeting Practice Exam 2025 – Complete Test Prep

The primary goal of fees in public finance is to recover full or partial costs of services. This approach aligns fees with the principles of fiscal responsibility and equitable funding of public services. When a government establishes fees for services, it aims to ensure that those who benefit from the service contribute to its cost, thereby reducing the reliance on general tax revenues. This can help in promoting fairness, as users of specific services pay for them rather than placing the entire financial burden on taxpayers who may not be using those services.

Furthermore, collecting fees allows public entities to manage budgets effectively by offsetting operational costs, which can be particularly important for services that are not fully funded through other taxation methods. This structure of cost recovery ensures sustainability and efficiency in service provision, helping to maintain the quality and availability of services to the community.