What is the main source of revenue for local governments?

Property tax is considered the main source of revenue for local governments because it directly funds essential services such as public education, police, fire departments, infrastructure maintenance, and local government operations. Property taxes are generally based on the assessed value of real estate, which allows local governments to generate a stable and predictable revenue stream, as property values tend to appreciate over time. This reliability helps ensure that local governments can plan and budget effectively for their long-term needs.

Other revenue sources, such as sales tax, income tax, and service fees, can vary significantly and may not provide the same level of consistency and dependability as property tax revenue. Sales tax relies on consumer spending, which can fluctuate with economic conditions. Income tax is often collected at the state and federal levels rather than by local governments. Service fees can also be inconsistent and are usually linked to specific services rather than providing a broad base of funding for general government operations.