When spending federal stimulus dollars, local governments are considering long-term, community impact

From staffing constraints to budget shortfalls and an unprecedented pivot into the digital realm (driven by the pandemic), local governments have confronted myriad challenges over the last few years. But in this, there’s a bright spot: The federal government is investing an unprecedented amount of money into local governments.

“The covid pandemic shuffled the deck for everybody—there’s been a terrible financial impact, without stimulus,” said Darryl Booth, managing director of govtech at Accela’s Center of Expertise. Accela provides software in the cloud for cities, counties and other forms of local governments.

But while the federal investment has been welcomed by local leaders, “It’s not a forever story, it’s something that’s here and now,” Booth said.

To that end, grants distributed to local governments through the American Rescue Plan Act will be given in a few tranches over two years. And anything that’s not used by local governments will eventually be redirected for other purposes. Thus, the onus is on local administrators to ensure their communities get what’s been given to them.

“Communities that aren’t taking advantage of these funds, that’s absolutely the worst case scenario,” Booth said. “There’s risk that congress will claw back these funds if they are not spent—after all, this is a stimulus package—if the money is not being spent by the cities, counties and states intended to use these funds.”

In talking to city and county administrators, Booth said he’s heard everything: from those who’ve already taken advantage of the opportunity, to ”Folks who are folding their arms across their chest saying, ‘I’m not spending that money, I don’t want to be beholden to the federal government,’” he said.

And along with those communities that aren’t interested in even applying, there are others who might feel they don’t have the necessary staff or technical expertise to apply: “There is a pathway to accessing the funds—they don’t just show up. It’s not a heavy lift,” Booth continued. “Make use of the funds. Spend them down the very last penny, and it’s not something you can take very long to do.”

More than taking advantage of the money that’s been set aside for communities, leveraging it in a fiscally responsible way is another hurdle organizations must navigate. In this, Booth said it’s important for administrators to consider the long view—where their community is going to be in 10 or 20 years—and the domino effect investments could have.

“It’s really an intensely local decision: the needs are vast, and very human centered. I don’t think anyone should sit and pass judgment on how the money is spent,” he said.

Because the money is being distributed in a few lump sums, considering the longevity of investments is also important. Investing in a new software program to streamline permitting and licensing, for example, could save a community a lot in the long run.

Directing allotments toward “The upfront costs of standing up a system—whatever it is,” Booth said, could pay dividends for decades to come. “Congress has on-purpose released this money in two tranches. Through that multi-year approach, they’re looking to local leaders to do something more.”