Hi Michael,
Great, thanks for the further details. Okay, so typically, for a single location local business, you're going to have a homepage, about page, contact page, testimonials page and set of pages defining the services the business offers. Multi-location businesses are more complex, but with just a single location, you'll want to be sure that the complete NAP of the business is on every page of the website, either in the masthead or footer. Be sure it's also the first thing on the Contact Us page, too.
While this provides good, strong signals to people and search engines about the locale of the business, it remains a good practice to optimize the title tags with your geo-terms as well. So, for example, let's say your insurance agency (Progressive) is in Oakland and offers fire, health, life, home and renters insurance. You'll have a page for each of these services, and the title tags might read like:
The fire insurance Oakland, CA residents trust most | Progressive
Oakland's most affordable health insurance | Progressive
etc.
Your tags will be better than that, but my point is that there will be variety of language, and that sometimes you may use both city and state names, and sometimes only the city. I don't believe state abbreviations are essential, with one very important exception: if the name of the city you live in occurs in numerous states, definitely do try to work in the state abbreviation when you can. For example, there are apparently 30+ cities called "Franklin" in the U.S. I continuously see Google assuming when I search for something in Fairfax, CA, that I'm actually searching for something in Fairfax, VA. It's very annoying. This tells me that state modifiers are important signals to Google, and so while it may not be necessary to always specify them, if your clients are in cities with analogs, I'd play it safe by including state abbreviations in as many title tags as I could. But, if the client is in San Francisco, it's a safer bet that Google (and searchers) are going to get where you are if you do business there, without the addition of CA to your title tags.
Hope this helps, and please let me know if you have any further questions.