Background: Advances in information technology have paved the way to facilitate accessibility to population-level health data through web-based data query systems (WDQSs). Despite these advances in technology, US state agencies face many challenges related to the dissemination of their local health data. It is essential for the public to have access to high-quality data that are easy to interpret, reliable, and trusted. These challenges have been at the forefront throughout the COVID-19 pandemic. Objective: The purpose of this study is to identify the most significant challenges faced by state agencies, from the perspective of the Behavioral Risk Factor Surveillance System (BRFSS) coordinator from each state, and to assess if the coordinators from states with a WDQS perceive these challenges differently. Methods: We surveyed BRFSS coordinators (N=43) across all 50 US states and the District of Columbia. We surveyed the participants about contextual factors and asked them to rate system aspects and challenges they faced with their health data system on a Likert scale. We used two-sample t tests to compare the means of the ratings by participants from states with and without a WDQS. Results: Overall, 41/43 states (95%) make health data available over the internet, while 65% (28/43) employ a WDQS. States with a WDQS reported greater challenges (P=.01) related to the cost of hardware and software (mean score 3.44/4, 95% CI 3.09-3.78) than states without a WDQS (mean score 2.63/4, 95% CI 2.25-3.00). The system aspect of standardization of vocabulary scored more favorably (P=.01) in states with a WDQS (mean score 3.32/5, 95% CI 2.94-3.69) than in states without a WDQS (mean score 2.85/5, 95% CI 2.47-3.22). Conclusions: Securing of adequate resources and commitment to standardization are vital in the dissemination of local-level health data. Factors such as receiving data in a timely manner, privacy, and political opposition are less significant barriers than anticipated.