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What explains variation in local health services? Comparative scholarship highlights economic factors, electoral competition, and partisanship to account for service disparities. Employing an original data set and qualitative case studies of health service provision in thirty-three metropolitan municipalities in Argentina between 1995 and 2015, we find that mayors are likely to provide more services when they are not aligned with the governor. Unable to access the discretionary resources and electoral support from governors that aligned mayors enjoy, non-aligned mayors exploit automatic provincial revenue-sharing health transfers, which reward municipalities that provide more services and have more infrastructure, in order to build territorial power. These findings highlight the importance of non-alignment and the conditions under which formula-based transfers encourage local service provision.