Municipal governments provide services to residents, formulate and enforce local laws, make infrastructure capital improvements, and provide local planning. The US has about 36,000 municipal and township governments, 3,000 county governments, and 38,000 special purpose districts with combined annual revenue of about $1.8 trillion.
Demand for municipal services is driven by population growth and demographics of the local population. Because municipalities must operate with a balanced budget, loss of revenue results in loss of services, usually through job cuts. Cities compete with one another to attract major employers, sometimes by offering tax breaks and other incentives.
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Services that municipalities provide depend partly on the size of the town or city but typically include a school system, police and fire protection, street and highway maintenance, water and sewer services, waste management, and various social services. Additional services can include municipal courts, jails, hospitals, housing, parks, libraries, colleges, public transportation, parking, conservation, airports, electricity, gas, and health and welfare services.