Well, at the state and (especially) the local level, it's the same "swamp" stuff you see on a national level but times ten. Towns with prominent families will often have people on boards and in local government, and sometimes that extends to state government as well. I know I'm not much of a fan of the State-level leadership here in Connecticut. There are some good ones (Nancy JOhnson comes to mind), but I recall this story from law school:
I was applying to schools, and trying to decide where to go. My roommate at the time was already in his first year at UConn, and I had things narrowed down to UConn and Georgetown. I went to "audit" a class at UConn with a friend of my roommate (and now a close friend of mine as well; I'll call him "Lars") and sat through the class. After, "Lars" and I met up with one of "Lars'" study partners - we'll call him "Robert" - and "Robert" introduced the person with him as also a prospective student auditing the class. We'll call him "Kirk". I talked with "Kirk" for about five minutes or so and we went our separate ways, and as we're walking to our car, "Lars" says, "It was rather nice of "Robert" to bring his friend "Kirk" to class; he didn't have to call him a prospective student, though. There's no way he's getting in with that handicap." (In short, my friend "Lars" thought "Kirk" was mentally handicapped). Fast forward to my first week of law school in September, and sure enough, there's "Kirk" in my class and about a month in, he walks in with a stack of promotional flyers for his campaign for State Representative, a race which he won. He served about 10 years in the State legislature, and now works in the State in varying capacities.
This is not a lesson in "don't judge a book by it's cover" ("Kirk" wasn't handicapped in any way; he just presented himself horribly); it's a lesson that the bar is set pretty low at the state and local level.