In this study, Data Envelopment Analysis (DEA) is as a possible tool to measure the relative technical efficiency of Taiwan local governments' spending of local revenues in 2002 and 2003, as well as the efficiency changes for these two years. The three inputs include current account and capital account of public expenditures and the number of public-sector employees, while the outputs are tax revenue and non-tax revenue. Constant return-to-scale (CRS) and variablereturn-to-scales (VRS) are used to measure the efficiency, and the statistical variation are measured with Mann-Whitney U test and regression analysis with Tobit model According to the results, local own-source revenues resulted in efficiency increases significantly in years 2002 and 2003. Among all the output factors by revenue category, house tax, land tax, regulation fees, revenues from surplus of public enterprises and public utilities, and other revenues resulted in efficiency increase significantly in years 2002 and 2003. According to the analysis of slack variables, half local governments were wasteful in their spending, and local governments employed redundant personnel. In other words, restricting the excessive spending is the key to the technical efficiency increase.