What percentage of local government revenue typically comes from central government grants?

The correct choice reflects a common understanding of the financial relationship between local and central government funding in many countries. In many instances, local governments rely significantly on funding from central government grants to support their budgets and maintain services. A typical figure is that about 75% of local government revenue can come from these grants.

This relationship is often established to ensure that local authorities can provide essential services such as education, transportation, and social care, especially in areas that may not have sufficient local revenue sources such as property taxes or local sales taxes. The dependence on central government grants also highlights the role of national policy in shaping the financial viability of local governments.

This percentage can vary significantly depending on the specific policies and funding mechanisms in place in different regions or countries, but the figure of 75% is within a commonly recognized range that aligns with historical trends in local government finance. Understanding this aspect of local government funding is crucial for analyzing how local administrations operate and adapt to changes in fiscal policy.