How are state and local government funded?

Primarily, cities get their funds through taxation and licensing, though there are other sources of income that cities rely on. Taxation might involve sales taxes, property taxes, corporate and Business Taxes, and the like. Licensing can cover any controllable resource, from fishing and hunting licenses to liquor and food licenses for restaurants and bars. Many larger cities also rely on federal or state funding for large construction projects, school systems, hospitals, and other public goods, or depend on money gathered from citations and fines for various public infractions (parking and traffic, code violations, etc.).