Local governments in the United States are established by the states. Because the U.S. Constitution does not mention cities, counties, or districts, the Tenth Amendment leaves the power to create them with state governments, and each state’s constitution and statutes lay out how new local governments come into being.1Library of Congress. U.S. Constitution – Tenth Amendment As of the 2022 Census of Governments, 90,887 local government units existed across the country, from large counties down to single-purpose districts that run a cemetery or a library.2U.S. Census Bureau. 2022 Public Use Files for State and Local Government Organization Every one of them exists because a state authorized it.
The State’s Power to Create Local Governments
Local governments are not independent sovereigns. They are subdivisions of the state, created at the state’s discretion. The U.S. Supreme Court said so directly in Hunter v. City of Pittsburgh (1907), holding that a state at its pleasure may modify or withdraw the powers of a municipality, alter its territory, unite it with another, or repeal its charter and destroy the corporation.3Justia. Hunter v. City of Pittsburgh, 207 U.S. 161 (1907) That language is over a century old and still controls.
In practice, each state legislature passes enabling acts and municipal codes that set the ground rules. These laws dictate everything from the minimum number of residents needed to incorporate a town to how a new district can raise revenue. Nothing about forming a local government happens outside those state rules.
Types of Local Governments a State Can Establish
The 2022 Census of Governments counted 3,031 counties, 19,491 municipalities, 16,214 townships, 39,555 special districts, and 12,546 independent school districts across the United States.2U.S. Census Bureau. 2022 Public Use Files for State and Local Government Organization Each category is established differently.
Counties are the broadest geographic units. Nearly every state is already divided into counties; Louisiana calls them parishes and Alaska calls them boroughs. Counties are established directly by the state constitution or by state statute, not through community petition. They typically handle state-mandated functions like courts, jails, property records, elections, and social services, and in unincorporated areas they may be the only local government providing road maintenance and law enforcement.
Municipalities are cities, towns, and villages. Unlike counties, they are created through an incorporation process when a community decides it wants its own government. This is the type most readers are asking about when they ask how a local government is formed.
Townships exist in about 20 states, concentrated in New England, the Mid-Atlantic, and the Midwest. They govern areas without requiring a minimum population concentration, which distinguishes them from municipalities. New England and some Mid-Atlantic townships function much like municipalities. Midwestern townships often focus on rural road maintenance and a few basic functions, commonly governed by a small elected board of three to five part-time trustees.
Special districts are the most numerous type of local government and the most overlooked. These single-purpose or limited-purpose entities deliver a specific service that may cross city or county lines, such as water supply, fire protection, sewer, flood control, housing and community development, or public transit.4U.S. Census Bureau. Special District Governments by Function: 2022 School districts operate similarly, as independent governments with their own elected boards and taxing authority. Creating a special district is typically simpler than incorporating a municipality, but it still runs through state enabling legislation.
Requirements Before a Community Can Incorporate
When residents of an unincorporated area want to form a new city or town, they have to satisfy prerequisites set by state law before the formal process can begin. The specifics vary, but a few requirements appear almost everywhere.
- Minimum population. Most states require the proposed municipality to have a minimum number of residents. Thresholds range widely, from as few as around 125 qualified voters in some states to 1,500 or more in others. A few states set higher bars for certain types of municipalities.
- Contiguous territory. The land within the proposed boundaries generally must form a single connected area without gaps or islands of unincorporated land.
- Distance from existing cities. Some states require that the proposed municipality not sit within a specified distance of an existing incorporated city, or that the nearby city consent. This prevents overlapping service areas and tax-base conflicts.
- Feasibility study. Many states require a formal study showing the proposed city can sustain itself financially. It typically covers population projections, an analysis of the local tax base, estimated service costs, projected revenues, and the fiscal impact on the surrounding county or other service providers.
The feasibility study is where most incorporation efforts live or die. If the numbers show the proposed city cannot generate enough revenue through property taxes, sales taxes, and other sources to fund basic services, the effort will stall no matter how much community support exists.
The Steps to Incorporate a New Municipality
Once a community meets the threshold requirements, residents launch the formal incorporation process. State procedures differ in their details, but the sequence is consistent.
Petition
The process begins with a petition signed by residents or landowners in the proposed area. Signature requirements vary. Some states require as few as 10 to 15 percent of qualified voters; others demand a majority or two-thirds. The petition typically includes the proposed name, a description or map of the boundaries, and a general plan for the services the new city would provide.
Review and Public Hearings
After signatures are collected and verified, the petition goes to a designated reviewing authority. Depending on the state, this might be a county board of supervisors, a state boundary commission, or another oversight body. The reviewing authority holds public hearings where supporters and opponents can be heard. The feasibility study and service plan receive close scrutiny. The reviewing body then issues a recommendation or decision on whether the incorporation moves forward.
Voter Approval
In most states, the final decision belongs to the residents of the proposed municipality through a referendum. If a majority votes in favor, the area officially becomes an incorporated city or town. An election to choose the first governing body, such as a mayor and council members, typically follows. Start to finish, the process can take anywhere from several months to several years, depending on the complexity of the proposal and the level of opposition.
Choosing a Structure and Charter
Once a municipality is established, it needs a governing structure. State laws generally offer several options, and the choice is often made during charter-drafting or set by default under state statute. The council-manager form, in which the elected council sets policy and hires a professional city manager to run operations, is the most common and is used by over half of U.S. cities. In the mayor-council form, the mayor is elected separately and typically holds significant executive authority, including over the budget and department heads; this form is typical of larger cities. A commission form, in which voters elect commissioners who each oversee a specific function, exists in less than one percent of cities today.
A charter is essentially a city’s constitution. It defines the structure of government, the powers the city can exercise, how ordinances pass, how elections are conducted, and how finances are managed. Not every municipality has its own charter, and the difference matters.
A general law city operates under the default rules established by state statute. The legislature defines its form of government, its powers, and its procedures. If state law does not grant a specific power, the city does not have it. General law status is common for smaller municipalities that do not need or want to draft a custom charter.
A home rule city adopts its own charter, giving it broader authority to govern local affairs without needing specific legislative permission for every action. A charter commission, typically a group of residents elected for the purpose, drafts the document. The proposed charter then goes to voters for approval. If adopted, it becomes the city’s governing document, subject to the constraint that it cannot conflict with the state constitution or state law on matters of statewide concern.3Justia. Hunter v. City of Pittsburgh, 207 U.S. 161 (1907)
Annexation as an Alternative to Incorporation
Incorporation is not the only way local government boundaries change. Annexation is the process by which an existing municipality expands to absorb adjacent unincorporated territory. Cities pursue annexation to manage urban growth, extend services, increase their tax base, and maintain coherent land-use planning.
Annexation comes in two basic forms. Voluntary annexation is initiated by property owners or residents in the unincorporated area who petition to join the city. Involuntary annexation is initiated by the municipality itself, sometimes without the consent of the people being annexed. Involuntary annexation has become increasingly controversial, and several states have tightened requirements over the past few decades, often requiring a vote of affected residents or imposing stricter review criteria.
For a community weighing its options, annexation can be an alternative to forming a new city. Joining an existing one brings access to its established services. The tradeoff is that annexed residents become subject to that city’s taxes and regulations without having shaped them.
How a Local Government Can Be Dissolved
Local governments can also be unmade, and the possibility is worth knowing about before establishing one. Municipal dissolution, or disincorporation, ends an incorporated municipality. The community may continue as a place, but its separate local government stops operating.
Dissolution happens in several ways. Most commonly, residents or the city council voluntarily eliminate the city government, usually because the municipality can no longer sustain itself financially. Some states trigger involuntary dissolution when a city’s population falls below a statutory minimum. In extreme fiscal crises, a state may impose dissolution.
The process is more complicated than it may sound. When a city dissolves, its revenues, assets, contracts, and debts must be reorganized. Public employees lose their jobs. Local ordinances, including zoning and land-use plans, are typically nullified. Services either end or transfer to the county or a special district. State laws generally require that a dissolution plan address how outstanding debts will be paid, often by authorizing the county to levy taxes on residents of the former municipality until obligations are satisfied. Courts have held that a state cannot dissolve a municipality if its creditors would be left with no effective way to collect. The territory of a dissolved city reverts to unincorporated status under the county’s jurisdiction.