Local Governments

The 90,000 local government entities in the US include counties, municipalities, towns and townships, as well as special purpose entities, such as special districts and independent school districts. Local governments generate revenue from taxes, intergovernmental funding, and fees for services provided. They use this revenue to fund the delivery of services for education, health, police protection, highways, public welfare, sewerage, solid waste disposal, parks and recreation, utilities, housing, and government administration.

Spending Mandates

Local governments are often required to spend money to comply with federal and state mandates, even when those mandates are unfunded.

Dependence On Property Taxes

Taxes are the largest revenue source for local governments and property taxes account for about 72% of tax revenues.

Sep 3, 2026 - Local Officials Say Threats and Harassment Increasingly Affect Their Work

• Many local leaders feel less comfortable being in public, according to a new survey from Princeton University’s Bridging Divides Initiative. Three-fourths of the mayors, councilmembers, county officials and other leaders surveyed are pulling back on public appearances. This includes both official duties and personal activities such as shopping. More than half of those surveyed said that they had experienced one or more forms of hostility in the previous three months, including insults, harassment, and threats. Examples of harassment as reported by public officials include publication of their personal information (doxing), and invasions of privacy such as showing up at their homes or following them or their family around town.
• The consequences of a widening flood insurance gap in the US are about to worsen for property owners and state and local governments, according to credit rating, research, and data analysis firm Moody's. The gap is widening in areas where insurers exit the market due to increasing rainfall amounts, stronger storm surge, more development in flood zones, cutbacks in federal aid, and aging river levees. Local property tax revenue often decreases after flooding events, as damaged sites lose value. That’s especially true in smaller, less-affluent counties and cities. The decrease in revenue can affect local credit ratings, costing jurisdictions more to issue bonds and borrow money. More costs related to flooding are being shifted onto state and local governments even as revenue decreases, as they may be asked to pay for debris removal, demolition of flooded structures, bridge replacement, road repairs and temporary housing.
• States need more time to comply with new Medicaid requirements, according to a report from the Center on Budget and Policy Priorities think tank. Many Medicaid expansion enrollees must document at least 80 hours per month of work or similar activities, meet an income threshold, or qualify for an exemption to keep coverage under the new requirements. States face a tight timeline to comply with complex eligibility, reporting, and verification processes before the requirements take effect on January 1, 2027. The Congressional Budget Office estimates that millions of people could lose coverage not because they fail to meet requirements, but because they struggle to navigate reporting systems or encounter administrative barriers. Without more time and clearer federal guidance, the report argues, states risk deploying aging or overburdened systems that are not fully ready.
• Local government employment has rebounded from pandemic-era lows and remained above pre-pandemic levels in mid 2026, according to the US Bureau of Labor Statistics. Local government revenue is forecast to grow at a 3.77% compounded annual rate from 2026 to 2030, 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.

Industry size & Structure

The average local government entity employs about 160 workers and generates $26-27 million in annual revenue.

• There are about 90,000 local government entities in the US with over 14.5 million employees and $2.4 trillion in annual revenue.
• Local government includes counties, municipalities, towns and townships, as well as special purpose entities, such as special revenue districts and independent school districts.
• General purpose entities include 3,031 county governments, 19,495 municipal governments, and 16,253 town and township governments.
• There are 38,542 special districts in the US, such as fire protection districts, public housing authorities, and irrigation management entities.
• There are 12,754 independent school districts. These do not include school districts run by state, county, municipal, or town governments.
• The largest city governments in the US, based on population, are New York, Los Angeles, Chicago, San Jose and Washington, DC.
• The largest county governments, based on population, are: Los Angeles County, CA: Cook County, IL; Harris County, TX; Maricopa County, AZ; and San Diego County, CA.