Background A review of the work of researchers in the field of quality reveals a connection between the use of quality improvement (QI) concepts and improved financial performance. The disconnect between the expanding role of public health and the levels of per capita spending to support this role suggests that local health departments with a change in funding might benefit by employing QI to increase service delivery efficiency. Purpose To examine the relationship between changes in local health department (LHD) total revenue during the 2008–2010 economic recession and changes in LHD quality improvement activities during the same period. Methods A matched-pairs study assessed change in revenue and associated change in QI activities at two points of time, 2008 and 2010. The study was completed in 2013. A proportional odds regression model estimated the adjusted ORs, measuring the association between change in QI activities and total revenue change, controlling for demographics, leadership QI training, and accreditation intention. Results Neither changes in revenue nor changes in expenses predicted change in QI activities in LHDs. Enhanced QI activities were found in LHDs led by a director with a master’s degree, led by directors trained in QI, or those serving medium-sized (50,000–499,000) jurisdictions. Conclusions This study revealed that neither changes in revenue nor changes in LHD expenses predict enhanced QI activities. Rather, improvements appear to be more related to characteristics of local health department leaders, which suggests areas to focus on for future efforts in public health services improvement.