What’s the difference between a federal, state, and local law?

What is the difference between a federal, state, and local law?

The US government is split into federal, state and local bodies that all set budgets, levy taxes, and make laws. Each body has different responsibilities that all function simultaneously.  The Tenth Amendment of the US Constitution delegates powers not expressly granted to the federal government to reside with the states, localities, or with citizens themselves. However, sometimes government responsibilities do overlap, so policies that address similar topics can, and often are, addressed at multiple levels of government.  

The framers of the Constitution set aside certain rights and obligations to be handled by states, while others needed to be handled by the federal government. Though this has fluctuated some over time, the general boundaries between jurisdictions usually depend on whether something is of importance to the nation as a whole (like interstate commerce or defense) or local concern (like speed limits or building codes).


The federal government encompasses the entire country and gets 80% of the money it spends on individual income and payroll taxes.  Another 9% comes from the corporate income tax, and the rest is from a mix of sources.  State, counties, and cities also get money from taxes.  Property taxes make up approximately 35% of revenue; sales taxes make up 34%, and corporate income tax is the smallest at 3%. Additionally, states and local governments secure grants and other funds for various purposes such as border security, law enforcement, and infrastructure.  County governments typically rely on property tax revenue, a portion of sales tax receipts, and funds from intergovernmental transfers by way of federal or state grants.  City governments typically rely on property tax revenue, a portion of sales tax receipts, taxes on business, and user fees from the provision of sanitation, water, and sewer services.


Each government body puts together an annual budget, a crucially important policy document that enumerates the government’s priorities for the upcoming year.  State and local governments are required by law to balance their budgets to ensure that they do not spend more than they bring in – 49 out of 50 states have balanced budget requirements (Vermont is the sole exception).

The federal government, on the other hand, is allowed to run a deficit and to borrow money to meet its obligations. Which means that the government can spend more than it brings in revenue.


The division of responsibilities and policy purview between federal, state, and local government is not always clear-cut.  Many court cases have been waged in the US to determine lines of demarcation between the governments’ levels of authority, and in many cases, these levels of authority overlap.  One simple example to help you understand the different levels of government can be seen in disaster response. If two or three houses on a street are on fire, the local government responds via local police and fire authorities.  If hundreds of houses are on fire, a collection of local government bodies responds, coordinated by state oversight. If thousands of acres are on fire, the federal government will likely oversee response efforts. This is a simplistic, yet helpful way to conceptualize how different policies can be categorized.

What are examples of federal laws?  Federal laws are rules that apply in every state and territory throughout the nation:

  •    Immigration laws
  •    Bankruptcy laws
  •    Social Security and Supplemental Security Income (SSI) laws
  •    Federal anti-discrimination and civil rights laws that protect against racial, age, gender and disability discrimination
  •    Patent and copyright laws
  •    Federal criminal laws such as laws against tax fraud and the counterfeiting of money

What are examples of state laws?  There are 50 states and several commonwealths and territories within the United States.  Each has its own system of laws and courts that handle:

  •    Criminal matters
  •    Divorce and family matters
  •    Welfare, public assistance or Medicaid issues
  •    Wills, inheritances, and estates
  •    Real estate and other property laws
  •    Business contracts
  •    Personal injuries such as from a car accident or medical malpractice
  •    Workers compensation laws

What are examples of local laws?  There are different counties, cities, municipalities, towns, townships, and villages in each state, commonwealth or territory.  Some of them have their own system of laws and courts that handle:

  •    Voter registration and the certification of election results
  •    Property tax evaluations
  •    Maintenance of roads, streetlights, bridges, courthouses, and jails
  •    Public recreational facilities like parks, pools, stadiums, and libraries
  •    Hospitals and clinics
  •    Rent laws
  •    Zoning and Land Use laws
  •    Building Regulations
  •    Law Enforcement & Fire Protections
  •    Public transportation
  •    Drinking water, sewage, and garbage disposal.

So are you ready to craft your first policy?  Go to http://lawmaker.io to get started!

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