Increasing adoption of automated vehicles (AVs) is likely to impact municipal budgets through reduced revenues, increased expenditures, and possible reduction in operating expenditures by adopting automated vehicles for municipal services.

Revenue reductions are likely to be caused by reduced parking revenues and traffic fines. A discussion of the potential impact of autonomous vehicle adoption on government finances for eight Canadian governments suggests a reduction in municipal parking revenues [1]. A combination of accelerated adoption of electric vehicles through a transition to automated vehicles would reduce tax receipts from gasoline and diesel fuels as well as parking, traffic violations, and other revenues by a range of 3 - 51 percent across 7 combinations of AV/EV/Shared scenarios in five Oregon Cities [2].

Increases in expenditures may come due to a decision to subsidize mobility and from infrastructure improvements. A survey of US officials' perspectives and preparations for automated vehicles suggests that cities and transportation agencies may seek to subsidize automated mobility for low-income individuals [3]. An Australian study found that some investment in infrastructure will be needed to accommodate AVs, but there is still uncertainty about needed expenditures [4].

However, cities may also reduce operating costs by performing municipal services with automated vehicles. One study estimates that using automated vehicles for trash collection could reduce operating costs by 32 - 63 percent [5].