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
Nov 12, 2022 - Major Consulting Firm Agrees To Settlement On Opioid Cases
- Management consulting firm McKinsey & Company has agreed to settle claims made by hundreds of local governments and school districts around the country that it contributed to an epidemic of opioid addiction through its work for bankrupt OxyContin maker Purdue Pharma LP and other drug companies. The consulting industry giant previously agreed to pay more than $600 million to settle opioid claims brought by all US states and territories, and had argued that those settlements should shield it from local governments’ and school districts’ lawsuits. It has not admitted wrongdoing. Plaintiffs accuse the company of pushing aggressive tactics to boost opioid sales, including by targeting doctors known to be prolific prescribers.
- New positions dedicated solely to sustainability have been cropping up in municipalities as awareness and political support for environmental issues such as climate change gain momentum. Eight municipalities in the Chicago suburbs, for example, have full-time sustainability directors in 2022, up from three in 2016, according to Edith Makra, the director of environmental initiatives for the Metropolitan Mayors Caucus. Experts say that a key job of sustainability directors is to bring projects underway in different local government departments, each typically managed by someone with many other responsibilities, together under one manager.
- Local governments are looking to new models of funding and building public housing amid the country’s most severe housing crisis in decades, according to Vox Media. A local public housing authority in Montgomery Country, MD, for example, is early in the process of constructing almost 9,000 publicly owned, mixed-income apartment units financed via a revolving fund that uses public money for short-term construction. Approximately 268 of the units are expected to deliver this year. “What I like about what we’re doing is all we have effectively done is commandeered the private American real estate model,” Montgomery County Housing Opportunity Commission Chief Real Estate Officer Zachary Marks told Vox. “We’re replacing the investor dudes from Wall Street, the big money from Dallas.”
- One of the biggest obstacles to increasing housing affordability by creating more living spaces is local zoning regulation, according to many experts. Common restrictions include limiting a building’s height, having strict parking requirements or outright bans on multifamily housing. “There is a significant cohort of municipalities throughout the United States that use zoning as a tool to essentially say, ‘we want to keep this community physically the same,’ which means all single-family homes,” said Yonah Freemark, a researcher at the Urban Institute. The Biden administration hopes to boost affordability within five years through a plan to provide grant money to localities that reform zoning regulations to incentivize more development of multifamily or high-density housing.
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