There are some weird justifications for spending in the CARES Act Coronavirus Relief Funds (CRF) accountability data. A single-use carousel ticket for $7.62. A draft letter to furloughed employees for $60. Sawmill and logging equipment totaling $95,229.
What about incredibly reductive entries like “reopening local government” and “continuation of essential gov’t function?” Or our all-time favorite: $85,696 brought to you by the letter “r.” That’s right, simply the letter “r” as justification for an award.
We might be a little tongue-in-cheek about some of these noteworthy expenses, but there is one clear, overarching lesson from the CRF oversight data: flexibility. If you can dream it, you can do it.
Looking Back: What We Learned From CARES Act Spending
The majority of CARES Act spending did go to specifically allowable uses such as payroll for public health and safety employees ($9.25 billion), medical expenses ($7.96 billion), and small business support ($7.17 billion). However, there was still great flexibility in how communities chose to spend their money.
For example, state and local governments spent over $100 million supporting the meat and dairy industries’ increasing capacity amid pandemic supply chain issues. They also turned motels into temporary housing, sidewalks and curb spaces into outdoor restaurant patios, and streets into walking and cycling paths.
So, while the CARES Act may have dictated that governments spend their funds on responding to the pandemic, many communities got creative and recognized that the health and economic needs of their residents went far beyond hospitals and pocketbooks.
Looking Forward: Lessons to Apply to Your ARP Funding
The American Rescue Plan (ARP) funding rules are even more flexible. The final ruling by the Treasury Department makes it clear that the administration expects state and local governments to use their fiscal recovery funds on more than just short-term responses.
To the extent possible, the ruling encourages governments to invest their funds in lifting populations that were disadvantaged before the pandemic and in those who people suffered most from its adverse impacts. What’s more, large governments are expected to explain their plans and data-gathering efforts, as well as report on their outcomes annually.
Sound daunting? Well, Treasury also says governments can use their ARP funds on things like program evaluation, data, and outreach. In other words, you can use federal funds to invest in data platforms that will inform the rest of your ARP spending.
Here’s one example of how that can pan out. You could use the funds first to do public outreach and information gathering. From there, you can acquire or enhance systems that allow you to make evidence-based decisions and prioritize projects. Finally, you could hire temporary staff or consultants to help you implement the plan and report on its outcomes.
Governments can do all of this without spending their general funds. Zero. Zilch. Nada.
And this might be the best part: funding from the Infrastructure Investment and Jobs Act that passed in November 2021 is now just starting to roll out. That means that you can and should engage your community now and capture feedback on projects you’re considering with ARP funds. While you’re at it, you should also facilitate community conversation surrounding your municipality’s infrastructure needs.
Taking Action: Why You Should Get Cracking Now
To us, the real question here is why wouldn’t you take this approach? You can use ARP money to do engagement for both your recovery plan and infrastructure bill projects right now. You can use that money to invest in technology platforms, like Cartegraph operations management software, that help you make data-driven decisions about where your recovery spending and infrastructure money should go.
Not only is that kind of approach the smart one for your community, but it could also give you a leg up in applying for new grants—some of which are competitive—opening up under the infrastructure bill.
Looking for a list of important ARP funding deadlines? Or what eligible-use categories Cartegraph software falls under? Download our summary »
So, while you’re considering what to do about your ARP funds, remember to embed the lessons we’ve learned from CARES. Be flexible. Begin with the end in mind. Spend money to get the data and outreach you need. Focus on making lasting change.
You and your team have a powerful responsibility. Now you have at least some of the investment needed to help make it happen. Go do great things. You've got this, and we’re here to help.
About Liz Farmer:
Liz Farmer is a fiscal policy expert, national journalist, and public speaker who has spent more than 15 years writing about the many ways state and local governments collect and spend taxpayer money. She is a regular contributor to Forbes and Route Fifty, and has also been published in the Wall Street Journal, Bloomberg, Chicago Tribune, and other top publications. Liz is also a consultant at Funkhouser & Associates and is a research fellow at the Rockefeller Institute of Government’s Future of Work Research Center.
About Nick Kittle:
Nick Kittle mentors and empowers public servants as a government performance and innovation coach at Cartegraph. Best-selling author of "Sustainovation: Building Sustainable Innovation in Government, One Wildly Creative Idea at a Time," he has spent 15 years in government, managed 17 government divisions, served as a chief innovation officer, and implemented over 65 first-of-its-kind pilot projects while directly generating $7.8 M in savings. A government thought leader and motivator, Kittle has written and spoken extensively for ICMA, National League of Cities, Harvard Government Innovators Network, Alliance for Innovation, Exago, Governing magazine, Government Technology magazine as well as podcasts with StrongTowns, National Research Center, Bang The Table, Polco, and Engaging Local Government Leaders. For more information, visit www.sustainovation.us.