Top 2023 Local Government Trends

While some may see the new year as nothing more than an arbitrary line in the sand, for local government leaders, turning the page into a new year means a new budget (for those with a fresh fiscal start), new opportunities, and new ways to make an impact.

With plenty of federal funding still available and the dust starting to settle in the post-COVID era, we anticipate local government looking very different by the end of 2023. The year will be a continuation of the digital revolution, as our nation’s local governments, special districts, and schools continue to embrace the perfect storm enabling investments in cloud software.

Trends for Government Leaders

As you continue planning for the next year, improve the way you serve and engage residents by prioritizing tech. Consider these 2023 local government trends to see why.

1. Cloud technology

Cloud technology tops the list yet again, and for good reason. As the technology continues to develop, so too do its benefits. The conversation swirling around cloud technology isn’t going anywhere either, as local governments look to update their processes.

Government leaders, which have grown accustomed to working in-person and on-premise, have to move work online to enable them to meet the requirements of their roles and the needs of their communities. With funding from Infrastructure Investment and Jobs Act (IIJA), governments have already begun expanding remote work infrastructure, broadband capability, and cybersecurity measures. With a significant amount of federal funding from ARPA and IIJA yet to be spent, there is no better time for local leaders to pivot to the cloud. Expect to see more governments adopt cloud technology in 2023.

1a. “Cloud washing”

For those who may not be familiar with the term, cloud washing is the intentional and at-times deceptive attempt to rebrand an old product by attaching the word “cloud” to it. 

Companies engaging in cloud washing will often port legacy, on-premise systems to a virtual environment and add the cloud label, despite it not being truly cloud-native. While many companies engaging in cloud washing likely do have some cloud integration, they haven’t adapted design, built the needed infrastructure, or hired dedicated management teams to support true cloud software.

In 2023, software providers may be tempted to repackage outdated products as they try to keep up with local governments adopting cloud solutions, so leaders should be on the lookout. Although on-premise software has its place, you won’t have access to the same great services and you’ll more than likely be partnering with a company that takes shortcuts, or is failing to stay current and covering it up with marketing.

2. Federal funding

Funding from the CARES Act, ARPA, and the most recent $1.2 trillion IIJA represents the greatest infusion of federal money into state and local governments in our lifetime. It’s offered an enormous, one-time opportunity for our nation’s local governments to update critical digital infrastructure.

More Info: OpenGov ARPA

While nearly all of the $350 billion in ARPA funds has been disbursed by the federal government to the states — though most had half the funds withheld to 2022 — and 83% of the money received in the first round of funding has been budgeted, according to this analysis by the Treasury Department, there is still a significant amount of funding to be spent.

Local leaders asked for help updating crucial systems, and these bills have provided it. In addition to the discretionary funds included in ARPA, $65 billion was allocated to Broadband from the IIJA. ARPA dollars earmarked as part of the State and Local Fiscal Recovery Fund (SLFRF) have already fueled massive changes across the country, and with significant funding still in play, this generational federal funding will continue to play a large role in 2023.


3. Customer experience

As the private sector continues to expand its list of features and perks, and as residents get more accustomed to doing all their shopping and business online, they’ve come to expect an improved experience from their local government, too. Local governments see an increasing need to deliver a better digital experience to local businesses and residents, enabling them to do business with administrative offices online and at any time. This is already happening at the federal level, and local leaders are wise to follow suit.

Advancement in artificial intelligence has many buzzing, and while it may not have a home in local government yet, that doesn’t mean local leaders can’t take steps to improve the user experience of residents. In fact, they should. Recent research suggests that over 85% of governments who don’t strategically take measures to improve user experience for both employees and residents will fail in transforming government services.

The cloud revolution is changing the way team members work, such as enabling virtual inspections for building and code departments. Currently, New Jersey and Florida are pushing requirements around virtual inspections, and it likely won’t be long until other states follow suit. Cloud technology, once again, comes to the rescue by providing an improved user experience.

Digital disruption is here to stay, and local governments are working to create personalized and user-friendly government services, such as online permitting and license renewals and transparent multi-year budgeting. By personalizing the experience and gaining trust over time, governments can deliver significant time savings, cross-agency service delivery and economic impact. 

4. Specialized public procurement software

In 2022, we saw hundreds of local governments adopt cloud-based eProcurement software, and with great success. In 2023, as more and more agencies catch wind of how cloud technology can improve workflows, we’ll see hundreds and maybe thousands more governments do the same.

In the interest of moving quickly, leaders might consider extending existing ERP software into the procurement department. However, stakeholders should be aware of common pitfalls associated with this type of integration. This software, primarily designed with the private sector in mind, can lead to unforeseen challenges such as: citizen/supplier protests, non-compliant processes, low adoption rates, expensive upgrades, poor vendor outreach, poor MWBE goal achievement, and lack of internal collaboration, among others.

Specialized public procurement software, on the other hand, includes essential features like public portal access, double-blind compliant processes, customizable workflows and language, public notices, records retention, calendars, public Q&A, public addenda notifications, open bid networks, and open meetings.

In 2023, we anticipate governments will choose procurement software designed for modern agencies with features you’ll rarely see in private market solutions, yet are essential to public procurement. This will be especially important in relation to the previous trend in this list.

Related: Public Procurement FAQs

5. Attracting New Talent

For many local governments in 2023, attracting and developing new talent is top of mind. The pandemic accelerated the “Silver Tsunami” with many key staff retiring, contributing to data loss. It’s also important to note that state and local governments never fully recovered from the Great Recession of 2008–09. Public-sector employment remained below pre-recession levels in the years after as policymakers disinvested in public services.

To attract and retain the next generation of local government leaders, governments are evolving the way they work. Local leaders have already devoted SLFRF dollars used to support public-sector workers. San Jose, California, was able to begin filling over 800 persistent vacancies in city jobs. Salt Lake City committed $1.5 million to hire unfilled public-sector positions. Overall, state and local governments have spent $51 billion in “revenue replacement.” Despite that spending, 44 of 50 states are still below pre-pandemic levels of state employees, which means attracting new talent will remain a trending topic for 2023.

Luckily, cloud software can contribute to rebuilding the public sector so that it can serve its vital roles in public health, safety, education, and more. It can enable remote work, a previously-unheard-of perk in government. It drives online permitting and licensing, which greatly reduces office traffic. This allows government employees to complete more strategic tasks they didn’t previously have time for. It also provides a framework for cross-departmental collaboration and unification. 

Governments become even more attractive employers during times of uncertainty. By leveraging cloud technology, local leaders can recruit and retain top talent and create a system to develop “non-traditional talent” for tomorrow.

6. Cybersecurity

Historically, state and local governments, healthcare organizations, agencies, and special districts have been attacked through legacy, on-premise servers and software with ransomware. Although these and other cyberattacks are far from a new phenomenon, cybercriminals are becoming more sophisticated and evolving attacks faster, so cybersecurity will continue to be a hot topic in 2023.

As government organizations continue to prioritize the security of their digital communities, it is essential to find trusted partners who can effectively and securely manage customer data. Performing proper due diligence, including verification of security compliance (such as SOC2) and understanding how data is protected, will be a critical element in reducing cybersecurity risks.

7. Sustainability

Sustainability has been moving into the public lexicon in the past few years, and 2023 will see that continue. In 2022, search data showed an increase in searches by residents and employees for things like “electric vehicles”, “water conservation”, “microgrid”, and “stormwater infrastructure.”

At the tail end of last year, the president of the American Public Works Association’s Center for Sustainability, James Patterson, PE, said he expected we’ll see local climate action plans move into the implementation stages. He also predicted that local governments will create more multi-modal transportation choices and improve local waterways.

The good news: cloud computing is capable of improving energy efficiency by 93%, and producing 98% fewer greenhouse gas emissions than on premises IT infrastructure, according to the Microsoft-WSP collaborative study. As sustainability becomes a more central concern for many communities, there’s never been a better time to move local government processes to the cloud.

Digitally Transform for Tomorrow

So there it is. Our list of 2023 local government trends. In many ways, 2023 will resemble 2022, but (we hope) in a less hectic sense. As the dust continues to settle, we expect to see local governments welcome tech transformations, using federal funds and improved technology to reach goals.

Interested in seeing how OpenGov can help your community in 2023? Learn more about our solutions and how they can help your organization.

Or, better yet, get a demo for a personalized experience into your digital transformation.

Last Updated on February 23, 2024 by Jeff Neukom

Categories: GovTech, Local Government, Thought Leadership

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