Local gov't and its not even close, in my opinion.
Let's assume you are in the 25% tax bracket. Obviously there are credits, deductions, and state taxes to consider, but let's just use Federal for this illustration. $4,000 more per year is $3,000 after-tax, in your pocket. A 45 minute commute compared to a 5 minute commute is most likely 30 more miles each way. Conservatively, let's say each mile costs you about $0.30 (most likely more). In a calendar year, with two weeks vacation, you will drive to work 250 days for a total of 15,000 more miles than the current commute. Those 15,000 miles will cost you $4,500 after-tax at the assumed rates. The health insurance reduction is just the icing on the cake, in my opinion.