Local government is not simply a smaller sized version of the national government or even state governments. Local government is quite different, as municipalities possess formal powers that are vastly more limited. Constitutionally speaking, a state creates its local governments and defines just what powers a municipality possesses and just what a locality may and may not do. Cities do not even possess the full authority to raise the funds needed to combat local problems. Instead, state laws determine what a locality may or may not tax and just how much money a local entity may borrow.