How do user fees function as a revenue source for government entities?

User fees serve as a revenue source for government entities by representing charges levied for specific services provided directly to the individuals or businesses that utilize them. This method of generating revenue allows government entities to fund particular programs or services, such as park admissions, public transportation, or sanitation services, without relying solely on general taxation.

By charging fees, governments can align the costs of providing these services with the revenue generated from their users, promoting a sense of accountability and ensuring that resources are allocated efficiently. This differs from general tax revenues, which are pooled from the citizenry and used for a broad range of services that may not directly correlate to individual benefit. Consequently, user fees provide a more targeted funding mechanism, linking the payment directly to the service being rendered, thus allowing for more transparent public budgeting.