Experts Talk: Smart Use of Relief Funds
May 10, 2021 by Meredith Trimble
“I don't think ever in our history, can I recall a time where governors were standing up in press conferences and not only using charts and data on a daily basis but actually using data to make decisions in, basically, real time,” said Tyler Kleykamp on a recent TylerTech Podcast episode. Kleykamp, director of the State Data Officers Network and fellow at Georgetown’s Beeck Center for Social Impact + Innovation, joined the podcast to discuss specific reasons why governments should use federal relief funds now to support data infrastructure.
And now is certainly the time for such investment. The American Rescue Plan Act (ARPA) of March 2021, opened up once-in-a-generation opportunity for governments to secure their future success. It is imperative for government leaders to plan and spend wisely, a notion shared by Mark Funkhouser, former mayor of Kansas City, Missouri, and president of Funkhouser & Associates. Funkhouser, too, joined the TylerTech Podcast in his own episode to discuss how governments can avoid wasting their stimulus dollars.
Highlights from these two relevant discussions follow below.
In Kleykamp’s informative podcast episode, he described in detail five reasons to use ARPA funds to invest in data infrastructure. “When we talk about this being an investment,” he noted, “it’s not a significant investment when you look at the amount of funding that’s coming to state and local government. If state governments, in particular, allocated just one half of one percent of the funding they are to receive, that would be a boost to developing this capacity.” In other words, setting up critical data infrastructure can be achieved with only a small fraction of a government’s funding.
According to Kleykamp, the top five reasons why governments should invest in this way include:
- Informed recovery. As we enter the recovery phase, there is a unique opportunity to set up the technical and personnel infrastructure to leverage data to better understand the pandemic’s impact and strategically target assistance to where there is the most need.
- Equitable recovery. Data can help governments connect those who have been disproportionately impacted by the pandemic with new opportunities in the workplace or workforce. Leveraging data can also help ensure, for example, that as we lift eviction and foreclosure moratoria, we can target impacted communities for things like rental assistance or hour programs.
- Modern digital infrastructure. There is a relatively low-cost opportunity to put a data infrastructure in place that can help governments integrate across different systems to improve operations and service delivery.
- Future data-driven problem solving. Infrastructure put into place now doesn’t go away; it puts governments in a position to continue leveraging and integrating data decades into the future.
- Short- and long-term success. A digital infrastructure can immediately help with recovery-related use cases. Those uses can then be scaled into other aspects of government work from improving traffic safety to making licensing requirements less burdensome for people.
As Kleykamp noted, applying even a small percentage of additional funding towards a data infrastructure will pay dividends down the road, noting Indiana’s return on investment of four-to-one. “The business case is right there for states to run with.”
“One of the real big problems in government, in local government, is to take one-time money and spend it on an ongoing thing,” Funkhouser noted. That leads right to the first of his five ways to not waste stimulus funds:
- Don’t misapply a temporary windfall. Do not use one-time money for an ongoing program that will require continued funding and result in ongoing operating costs well after the initial funding goes away.
- Invest to reduce operating costs. Use new working capital with no debt service to invest in infrastructure projects, training, or other items that have significant upfront costs but that will reduce operating expenses in the future.
- Think beyond your borders. There are things such as transit investments that benefit an entire region but that no single government can afford. If multiple governments in a region pool their resources, they can achieve big things that have to date been impossible.
- Invest in technology and cybersecurity. Investing in critical technology and cybersecurity can save significant costs in the future with improved efficiencies and decreased risk.
- Avert short-term disaster. Invest in social services and small businesses to address community issues and ensure local businesses survive and thrive.
“For so long,” Funkhouser noted, “governments have been patching things together and trying to figure out how to fill the last budget hole and so on. Now's the time to think carefully, collaborate with your other governments, listen to your citizens … After you've had the conversation with the community, the stakeholders, the citizens, your own employees, the other governments in the region, you need to map out the whole thing from now until December 31st, 2024.”