Local governments serve as the most direct connection between citizens and their government, handling everything from police protection to zoning decisions. Understanding what local governments can and cannot do by law is essential for residents, business owners, and civic leaders alike. A local government must be granted power by the state, creating a complex legal framework that varies significantly across the United States.

The powers and limitations of local governments are shaped by constitutional principles, state laws, judicial interpretations, and the ongoing tension between local autonomy and state control. This comprehensive guide explores the legal authority of local governments, the restrictions they face, and how these rules impact communities across America.

Understanding the Constitutional Foundation of Local Government Authority

The Constitution of the United States does not mention local governments. Instead, the Tenth Amendment reserves authority-giving powers to the states. This fundamental principle establishes that local governments are creatures of state law, deriving all their powers from state constitutions and statutes rather than directly from the federal Constitution.

The Tenth Amendment declares, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people". This means states possess broad authority to create, modify, or even abolish local governments as they see fit.

Local governments exercise only those powers that are granted to them by the states, and a state may redefine the role and authority of local government as it deems appropriate. This subordinate relationship forms the basis for understanding what local governments can and cannot do legally.

The Variety of Local Government Structures

There are some 85,000 local government units in the United States. These include counties (called parishes in Louisiana and boroughs in Alaska), municipalities (cities, towns, and villages), townships, and special districts. Each type of local government has different powers and responsibilities depending on state law.

Municipalities generally take responsibility for parks and recreation services, police and fire departments, housing services, emergency medical services, municipal courts, transportation services (including public transportation), and public works (streets, sewers, snow removal, signage, and so forth).

Special districts are areas with a defined territory in which a specific service is provided, such as port or fire districts. These districts lack plenary power to enact laws, but do have the power to promulgate administrative regulations that often carry the force of law within land directly regulated by such districts.

Dillon's Rule: The Traditional Limitation on Local Authority

One of the most important legal doctrines governing what local governments can do is known as Dillon's Rule. Dillon's Rule is based on an Iowa state court case where Judge John Dillon ruled that municipalities could exercise only those powers that were expressly granted by the state or that could be reasonably considered to be indispensable to those declared purposes (Clinton v. Cedar Rapids and Missouri River Railroad, 24 Iowa 455, 476 [1868]).

Dillon's Rule takes a narrow approach to local authority, essentially stating that local governments only have the powers expressly granted to them by the state. This restrictive interpretation means that if there is any doubt about whether a local government has the authority to take a particular action, the answer is presumed to be no.

How Dillon's Rule Applies Across States

Thirty-nine states employ Dillon's Rule to define the power of local governments. Of those 39 states, 31 apply the rule to all municipalities and eight (such as California, Illinois, and Tennessee) appear to use the rule for only certain municipalities. Ten states do not adhere to the Dillon Rule at all.

The ability of local governments to respond effectively to local conditions in the late 1800s was severely limited by Dillon's Rule; no local action could be undertaken without permission from the state legislature, which only met for short, biennial sessions. As such, Dillon's Rule generally requires that local officials spend a considerable amount of time lobbying the state legislature to approve bills granting local authority and disapprove bills imposing restrictions on them.

Under Dillon's Rule, local governments face significant constraints. They cannot create new programs or services unless the state has specifically authorized them to do so. This can make it difficult for communities to respond quickly to emerging challenges or unique local circumstances.

Home Rule: Expanding Local Government Powers

In response to the rigidity of Dillon's Rule, many states adopted home rule provisions to give local governments greater flexibility. Home rule is a delegation of power from the state to its sub-units of governments (including counties, municipalities, towns or townships or villages). That power is limited to specific fields, and subject to constant judicial interpretation, but home rule creates local autonomy and limits the degree of state interference in local affairs.

The inflexibility of this system is the reason that many states began to adopt "home rule" provisions in the early 1900s that conferred greater authority to their local governments. Home rule represents a philosophical shift toward recognizing that local governments should have the freedom to address local problems without constantly seeking state permission.

Types of Home Rule Authority

In some states, known as home rule states, the state's constitution grants municipalities and/or counties the ability to pass various types of laws to govern themselves (so long as the laws do not conflict with the state and federal constitutions).

Home rule authority typically falls into several categories:

  • Structural powers – the ability to choose the form of government and enact charter revisions
  • Functional powers – authority to exercise local self-government in various policy areas
  • Fiscal powers – authority to determine revenue sources and set tax rates within limits
  • Personnel powers – authority to set employment rules and conditions

Typically, the broadest discretionary powers are applicable to local government structure, and the narrowest are given to finance. This means that even home rule jurisdictions often face significant state-imposed limitations on their taxing and spending authority.

The Reality of Home Rule

Dillon's Rule and home rule states are not polar opposites. No state reserves all power to itself, and none devolves all of its authority to localities. Even in strong home rule states, local governments remain subordinate to state authority and must comply with state and federal law.

The National Association of Counties says in 14 states all counties (or county equivalents) operate under Dillon's Rule, while 13 states allow all counties home rule authority and 21 states have a mix of home rule and Dillon's Rule. This creates a patchwork of local government authority across the country.

Core Powers of Local Governments

Despite variations in state law, local governments across the United States generally possess certain core powers that enable them to serve their communities effectively.

Legislative and Regulatory Powers

Local governments pass laws through ordinances, following a process of proposal, public meetings, committee review, and voting, all while complying with state and federal laws. These ordinances can regulate a wide range of local activities, from noise levels to business operations.

Local governments have authority over land use and zoning, which represents one of their most significant powers. They can designate areas for residential, commercial, or industrial use, establish building codes, and regulate development to protect public health and safety. This power allows communities to shape their physical development and character.

Taxation and Revenue Generation

Local governments have the power to collect various types of taxes and fees to fund public services. Property taxes represent the primary revenue source for most local governments. They can also impose sales taxes, business license fees, utility fees, and other charges, though these powers are typically subject to state-imposed limitations.

Local governments are created by and subordinate to state governments, cannot pass laws contradicting state legislation, and rely primarily on property taxes and service fees rather than broader tax bases. This limited revenue authority can constrain local governments' ability to fund services and respond to community needs.

Provision of Public Services

States granted authorities for municipalities to become incorporated and establish government structures to address the needs of the people—primarily including sanitation, utilities, infrastructure, public safety, and regulation of both civic and commercial activities.

Local governments provide essential services including:

  • Police and fire protection
  • Water and sewer systems
  • Street maintenance and snow removal
  • Parks and recreation facilities
  • Libraries and cultural programs
  • Emergency medical services
  • Building inspection and code enforcement
  • Local courts and judicial services

The specific services provided vary based on the type of local government, state law, and local needs. Counties often provide services in unincorporated areas, while municipalities typically offer a broader range of services within city limits.

Police Powers

Local governments possess police powers—the authority to regulate for the health, safety, and welfare of the community. This broad power allows them to address public health threats, regulate potentially dangerous activities, and protect residents from harm.

Police powers enable local governments to adopt building codes, health regulations, fire safety standards, and environmental protections. However, these powers must be exercised reasonably and cannot violate constitutional rights or conflict with state and federal law.

Major Restrictions on Local Government Authority

While local governments possess significant powers, they also face substantial legal limitations that constrain their actions.

Constitutional Limitations

Local governments must comply with both the U.S. Constitution and their state constitution. They cannot violate individual rights protected by the Bill of Rights, including freedom of speech, religion, and assembly. They must provide due process and equal protection under the law.

The Constitution forbids states to enter into treaties, to tax imports or exports, or to coin money. States also may not adopt laws that contradict the U.S. Constitution. These same prohibitions apply to local governments, which possess even less authority than states.

Local governments cannot:

  • Regulate interstate commerce
  • Enter into treaties with foreign nations
  • Coin money or issue currency
  • Impair the obligation of contracts
  • Deny equal protection or due process
  • Infringe on fundamental constitutional rights

State Preemption

State preemption represents one of the most significant limitations on local government authority. States can limit or override local laws through preemption — a legal doctrine that the tobacco industry has used as a deregulatory tool against local public health initiatives. Similar to the federal-state hierarchical structure, because local governments are subordinate to state governments, state laws supersede local laws if the two conflict, and state legislatures may limit or eliminate local authority.

State legislatures can preempt local action in several ways:

  • Express preemption – State law explicitly prohibits local regulation in a specific area
  • Implied preemption – State law occupies the field so comprehensively that no room remains for local regulation
  • Conflict preemption – Local law conflicts with state law, making the local ordinance invalid

In recent years, states have increasingly used preemption to prevent local governments from regulating in areas such as minimum wage, paid sick leave, plastic bag bans, gun control, and sanctuary city policies. This trend has sparked significant debate about the appropriate balance between state and local authority.

Fiscal and Taxation Limits

States impose various limitations on local government taxing and spending authority. Many states have constitutional or statutory limits on property tax rates or the annual increase in property tax revenue. Some states require voter approval for tax increases above certain thresholds.

Local governments typically cannot:

  • Impose taxes beyond state-authorized limits
  • Create new types of taxes without state authorization
  • Exceed debt limits established by state law
  • Spend money for purposes not authorized by law

These fiscal constraints can significantly limit local governments' ability to fund services and respond to community needs, particularly during economic downturns or periods of rapid growth.

Limitations on Regulatory Authority

Local governments cannot pass laws contradicting state legislation. This means that even in areas where local governments have regulatory authority, they must ensure their ordinances comply with state law.

Local governments generally cannot regulate in areas that are primarily state or federal responsibilities, such as:

  • Public education policy (though they may operate schools under state authority)
  • Professional licensing for most occupations
  • State highway systems
  • Criminal law beyond local ordinances
  • Immigration enforcement
  • Environmental standards stricter than state law (in some states)

Specific Examples of What Local Governments Cannot Do

Understanding the limitations on local government authority requires examining specific examples of prohibited actions.

Cannot Violate Constitutional Rights

Local governments cannot pass ordinances that infringe on constitutional rights, even if such laws might be popular with local residents. For example, they cannot:

  • Prohibit religious worship or favor one religion over another
  • Restrict political speech in public forums
  • Conduct unreasonable searches and seizures
  • Deny due process in administrative proceedings
  • Discriminate based on race, religion, or other protected characteristics

Courts will strike down local ordinances that violate constitutional protections, regardless of the local government's intentions or the community's preferences.

Cannot Exceed State-Granted Authority

In Dillon's Rule states, local governments cannot take actions beyond those specifically authorized by state law. Under Dillon's Rule, a substate government may engage in an activity only if it is specifically sanctioned by the state government.

This means local governments in these states cannot create new programs, impose new regulations, or provide new services unless the state has granted them authority to do so. Even seemingly minor actions may require state legislative approval.

Cannot Regulate Interstate Commerce

The Commerce Clause of the U.S. Constitution grants Congress the power to regulate interstate commerce. Local governments cannot pass ordinances that unduly burden or discriminate against interstate commerce.

For example, local governments generally cannot:

  • Impose tariffs or taxes on goods from other states
  • Require businesses to favor local suppliers
  • Create barriers to interstate trade
  • Regulate activities that occur primarily in other states

Cannot Ignore State Preemption

When state law preempts local action in a particular area, local governments cannot regulate in that field, even if they believe local regulation would better serve their community. Recent examples of state preemption include:

  • Minimum wage laws – Some states prohibit local governments from setting minimum wages higher than the state minimum
  • Gun regulations – Many states preempt local gun control ordinances
  • Plastic bag bans – Several states have prohibited local governments from banning plastic bags
  • Sanctuary city policies – Some states forbid local governments from limiting cooperation with federal immigration enforcement
  • Short-term rental regulations – Some states limit local authority to regulate platforms like Airbnb

The Autonomy Local Governments Do Possess

Despite these limitations, local governments maintain meaningful autonomy in practice. They have survived legal control and intergovernmental regulation to exercise four pillars of autonomy: (1) the power of initiative, or the ability to act in a purposeful fashion; (2) the power of immunity, or the ability to act without fear of the direct supervisory oversight authority of higher tiers; (3) some freedom from higher-level preemption; and (4) abilities of concurrence, that is, to be able to act through intergovernmental relations.

In a nonlegal sense, local governments maintain their autonomy from their ability to speak for citizens at the community level and from their capacity and standing as jurisdictions, as they participate actively in decisions by other governments that affect their interests and functions.

Areas of Strong Local Control

Local governments typically exercise substantial control over:

  • Land use and zoning – Determining how property can be used and developed
  • Local infrastructure – Building and maintaining streets, sewers, and water systems
  • Building codes – Establishing construction standards for safety and quality
  • Local public safety – Operating police and fire departments
  • Parks and recreation – Creating and managing public spaces and programs
  • Local business regulation – Licensing and regulating local businesses

In these areas, local governments often have significant discretion to tailor policies to local conditions and preferences, subject to state and federal law.

How Local Government Powers Vary by Type

Different types of local governments possess different powers and face different limitations.

County Governments

Counties were originally formed as administrative arms of the state government to provide greater oversight and implementation of state laws and mandates. However, as populations grew and demands for services increased beyond the capacity of the state, most states granted greater authority to counties to meet those demands.

States maintain a high level of authority and mandate counties to meet state-adopted levels of service and to deliver state services and programs within their jurisdictions. States also have the authority to stipulate how counties can levy taxes upon their residents and enumerate the powers counties actually possess.

Counties often serve as the primary local government in rural areas, providing services such as law enforcement, road maintenance, and social services. In urban areas, counties may share responsibilities with municipal governments.

Municipal Governments

Cities, towns, and villages typically have broader authority than counties to regulate local affairs. Municipal governments are organized local governments authorized in state constitutions and statutes, established to provide general government for a defined area, generally corresponding to a population center rather than one of a set of areas into which a county is divided.

Municipalities often have more flexibility in their structure and operations, particularly if they operate under home rule charters. They typically provide a wider range of services than counties and have greater authority over land use and local business regulation.

Special Districts

Special districts consist of independent governments with a limited purpose usually focusing on a specific service such as water and sanitation. These single-purpose governments have authority only in their designated area of responsibility.

Special districts can provide services such as:

  • Water and sewer service
  • Fire protection
  • Public transportation
  • Parks and recreation
  • Libraries
  • Hospital services

While special districts have focused authority, they face the same constitutional and state law limitations as other local governments.

The Role of Courts in Defining Local Government Powers

Courts play a crucial role in interpreting the scope of local government authority. When disputes arise about whether a local government has the power to take a particular action, courts must decide based on constitutional provisions, state statutes, and legal precedents.

Cooley's Rule was followed for a short time by courts in Indiana, Iowa, Kentucky and Texas until the U.S. Supreme Court upheld Dillon's Rule in 1907 (Hunter v. City of Pittsburgh) and again in 1923. This judicial endorsement of Dillon's Rule has shaped local government law for over a century.

Courts generally apply several principles when evaluating local government authority:

  • Local ordinances are presumed valid unless clearly contrary to law
  • Ambiguities in grants of power are resolved against the local government in Dillon's Rule states
  • Home rule provisions are interpreted to provide meaningful local autonomy
  • State preemption must be clear to override local authority
  • Local governments cannot exceed their territorial jurisdiction

Intergovernmental Relations and Cooperation

Local governments don't operate in isolation. They frequently interact with state and federal governments, as well as with other local governments, creating a complex web of intergovernmental relations.

State-Local Relations

There is a great diversity in state-local relations between, as well as within, states. This means that to speak of local government in the United States is to speak of more than fifty different legal and political situations.

States provide funding to local governments through various mechanisms, including revenue sharing, grants, and shared taxes. However, this funding often comes with strings attached, requiring local governments to meet state standards or implement state policies.

Interlocal Cooperation

Local governments can cooperate with each other to provide services more efficiently or address regional challenges. Many states authorize interlocal agreements that allow governments to share resources, jointly provide services, or coordinate policies.

Examples of interlocal cooperation include:

  • Regional planning organizations
  • Shared emergency services
  • Joint purchasing agreements
  • Metropolitan transit authorities
  • Regional water and sewer systems

The balance of power between state and local governments continues to evolve. Several trends have emerged in recent years that affect what local governments can and cannot do.

Increased State Preemption

Different interest groups continue to seek ways to limit local authority by supporting sweeping preemption laws and restrictive judicial interpretation of home rule authority. The recent surge in hyper-preemptive statutes and the increased restrictive judicial interpretation of home rule powers vis-à-vis preemption has caused different organizations and scholars to reexamine the home rule doctrine and develop principles that draw an appropriate balance between states and their local governments.

This trend has sparked debate about whether state preemption undermines local democracy and prevents communities from addressing local problems effectively.

Local Innovation and Experimentation

Despite increased preemption, many local governments continue to innovate and experiment with new approaches to governance and service delivery. Cities and counties serve as "laboratories of democracy," testing policies that may later be adopted at the state or national level.

Areas of local innovation include:

  • Climate change mitigation and adaptation
  • Affordable housing strategies
  • Economic development initiatives
  • Smart city technologies
  • Community policing reforms
  • Public health interventions

Fiscal Challenges

Local governments face ongoing fiscal challenges that affect their ability to exercise their powers effectively. Property tax limitations, unfunded state mandates, and economic fluctuations can constrain local government operations and service delivery.

Practical Implications for Citizens and Businesses

Understanding what local governments can and cannot do has practical implications for residents and businesses operating within their jurisdictions.

For Residents

Citizens should understand that:

  • Local governments have authority over many issues that directly affect daily life
  • Some problems require state or federal action and cannot be solved locally
  • Participation in local government can influence decisions on zoning, services, and regulations
  • Local ordinances must comply with state and federal law
  • Citizens can challenge local actions that exceed legal authority

For Businesses

Businesses operating in multiple jurisdictions must navigate varying local regulations. Understanding local government authority helps businesses:

  • Comply with applicable local ordinances
  • Anticipate potential regulatory changes
  • Identify opportunities to influence local policy
  • Understand when state law preempts local regulation
  • Plan for differences in requirements across jurisdictions

Resources for Understanding Local Government Powers

Several organizations and resources can help citizens, officials, and researchers understand local government authority:

  • National League of Cities – Provides information and advocacy for municipal governments (https://www.nlc.org)
  • National Association of Counties – Represents county governments and provides resources on county authority
  • International City/County Management Association – Offers professional development and research on local government management (https://icma.org)
  • State municipal leagues – Each state has organizations that provide information about local government law in that state
  • State attorney general opinions – Many states publish legal opinions interpreting local government authority

Conclusion: Balancing Local Autonomy and State Control

The question of what local governments can and cannot do by law reflects fundamental tensions in American federalism. Local governments must balance their role as responsive, democratic institutions close to the people with their legal status as subordinate units of state government.

The authority of the federal and state governments overlap in some areas; for example, the state and federal governments both have the power to tax, establish courts, and make and enforce laws. In other areas, such as the regulation of commerce within a state, the establishment of local governments, and action on public health, safety, and morals, the state governments have considerable discretion.

The legal framework governing local government authority varies significantly across states, with some providing broad home rule powers and others maintaining strict Dillon's Rule limitations. Understanding these variations is essential for anyone seeking to influence local policy or understand how local government works.

As communities face new challenges—from climate change to technological disruption to demographic shifts—the debate over local government authority will continue. Finding the right balance between local autonomy and state oversight remains an ongoing challenge in American governance.

Whether local governments have sufficient authority to address contemporary challenges, or whether they need greater freedom from state control, depends on one's perspective on the proper role of local government in our federal system. What remains clear is that local governments, despite their limitations, play an indispensable role in American democracy, providing essential services and serving as the most direct connection between citizens and their government.

For more information about state and local government structures and powers, visit the USA.gov State and Local Government page or consult your state's municipal league or association of counties.