What is the primary source of revenue for local governments?

Local governments primarily rely on property tax as their main source of revenue. This tax is levied on real estate properties, and it is a significant funding mechanism for essential local services such as public education, infrastructure maintenance, public safety, and community services. Property tax provides a stable and predictable source of funds since property values tend to change less frequently compared to sales or income.

While sales tax, income tax, and service fees do contribute to the overall revenue of local governments, they typically do not match the consistent and substantial revenue generated from property taxes. Sales tax can fluctuate with economic conditions, income tax is generally more relevant at the state and federal levels, and service fees are often limited to specific services rather than providing broad-based revenue. Hence, property tax remains the cornerstone of local government funding.