Local Governments NAICS 921110, 921130

Mar 4, 2026 - Cybersecurity Legislation Efforts Continue

• State governments passed 99 cybersecurity-related bills in 2025, according to the Government Technology news site. Maryland passed 14 of the laws, Texas passed 11, Arkansas passed nine, and Florida four. The remaining 33 states passed between one to three bills each. About 51% align with the governance function of the National Institute of Standards and Technology Cybersecurity Framework. Governance laws reflect an emphasis on leadership structures, oversight and reporting requirements. States continue to build or expand centralized cybersecurity offices, establish statewide strategies and require agencies to implement baseline protections. The most common policy action was mandating cybersecurity controls such as encryption, access management, and secure configurations, according to the University of California, Berkeley, Center for Long-Term Cybersecurity. Many of the bills, however, rely on broad terms like “reasonable security measures,” leaving agencies to interpret what compliance means. A smaller group of states adopted more specific requirements, including phishing-resistant multifactor authentication or alignment with recognized security frameworks.
• Officials in several states have said that they plan to regulate AI as they see fit despite a presidential executive order that Trump administration officials say is intended to pave the way for more AI innovation by combating “burdensome” state regulations and calling for a single regulatory environment in place of a state-by-state patchwork, according to Governing.com. Forty-six states passed 159 AI laws in 2025 alone. State laws range from regulating AI chatbots to requiring disclosure of AI use in political ads and more. The executive order gives a few guideposts about what Trump would like to see, according to Governing.com. The order suggests, for example, that Congress’ eventual federal AI policy should not pre-empt certain kinds of state laws: those regarding child safety protections, data center infrastructure, and state government use and procurement of AI.

• Local sales and income taxes generate 13% and 5% of local tax revenue, respectively, making them the two main supplements to property taxes, according to the Tax Foundation. Local sales taxes are imposed by 36 states and the District of Columbia. They constitute more than 40% of local tax collections in Alabama, Arkansas, Louisiana, and New Mexico. Local income taxes are authorized in 16 states and the District of Columbia. They account for more than 20% of local tax collections in Kentucky, Maryland, and Ohio. Localities in only seven states, mostly in New England, do not impose either local income taxes or local sales taxes.
• Local government employment has rebounded from pandemic-era lows and remained above pre-pandemic levels in early 2026, according to the US Bureau of Labor Statistics. Local government revenue is forecast to grow at a 3.68% compounded annual rate from 2025 to 2029, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. The primary revenue sources for local governments are taxes, federal and state funding, and fees charged for services.