Local Governments
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
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.
Dependence On Property Taxes
Taxes are the largest revenue source for local governments and property taxes account for about 72% of tax revenues.
Spending Mandates
Local governments are often required to spend money to comply with federal and state mandates, even when those mandates are unfunded.
Industry size & Structure
The average local government entity employs about 154 workers and generates $21-22 million 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.
- There are about 90,000 local government entities in the US with over 13.9 million employees and $1.9 trillion in annual revenue.
- 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.
Industry Forecast
Local Governments Industry Growth

Recent Developments
Mar 3, 2023 - Third State Eliminates Local Governments’ Ability to Stop Solar and Wind Projects
- Illinois Governor J.B. Pritzker signed into law in late February a bill that took away the ability of local governments to limit or ban wind and solar power. The measure follows similar actions in California and New York. Supporters of the law said that the state had little choice because local governments have relied on misleading or false information about the safety and economics of renewable energy to pass rules that are not in the public interest, according to Inside Climate News. Local officials in some areas have said they are responding to legitimate worries about the way wind turbines change the visual landscape and to concerns about health and safety of renewable energy.
- Local governments looking to reduce greenhouse gases and better manage community resources are including zero-waste strategies and policies in municipal plans for waste management, climate action, or sustainability, according to The Municipal Research and Services Center (MRSC). Waste and consumed goods that become waste are rapidly increasing sources of greenhouse gas emissions, according to MRSC. A zero-waste approach is to minimize, recover, and treat waste, rather than dispose of it. Zero-waste efforts encompass both the broad (sustainable materials management) and the targeted (re-use/repair events), so local governments can tailor activities to meet strategic goals, but also to utilize existing resources within their communities, accordign to MRSC.
- Some local governments object to a measure in proposed federal legislation that would mandate how state and local governments present their financial results to investors, according to The Wall Street Journal. Municipalities file reports according to different standards, and the files aren’t machine-readable by investors attempting to study city or state finances before they buy or sell municipal bonds. Lawmakers and companies that sell financial reporting software say that the proposal will aid investors and the public by improving transparency. Bankers, investors, and local officials all warn of problems from increased costs to accounting headaches if Congress passes the measure. Several major investment firms warn that small borrowers might abandon the market altogether, pursuing private loans from banks or money managers. That would give municipal bond investors a narrower array of bonds to choose from in the public markets.
- Local governments are pushing back against investors who buy properties and turn them into short-term rental units. Officials and housing advocates say that the increasing practice of purchasing houses with the intent of listing them on short-term-rental sites like Airbnb and Vrbo makes it hard for regular homebuyers to compete for them. San Diego's city council, for example, adopted an ordinance that would cap short-term-rental properties at 1% of the local housing stock, or about 5,400 units. Voters in Colorado towns like Dillon, Aspen, and Steamboat Springs have approved measures to tax short-term rentals to help regular homebuyers afford homes. There were over 6.1 million short-term-rental listings across the US in September 2022, a 19% increase from September 2019, according to AirDNA.
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