Rescue Plan Recognizes Need for ‘Resilient Infrastructure’ for Local Governments
“I’m going to act, and I’m going to act fast. We need an answer that meets the challenge of this crisis.”
President Biden said last Friday at the White House after meeting with congressional Democrats on his $1.9 trillion American Rescue Plan.
The plan is intended to fund programs that include federal unemployment insurance and financial assistance for state, local and tribal governments according to the National Association of Counties’s (NACo) analysis released February 10.
This legislation is in markup as this is being written. At this stage, it is authorizing a total of $1.9 Trillion in new spending, with $65 Billion allocated to cities and another $65 Billion to counties. The city funds are to be distributed under CDBG formulas, while the county distribution is to be on the higher of per-capita or CDBG formulas, and will include every county in the country. By the author’s math that is something over $200 per resident to the counties, city formulas are more complex.
After helping my city fight through the Great Recession of 2008-09 I have followed the federal response to this pandemic and resulting economic crisis closely. Last year I wrote an ebook, CARES Act Funds for Cloud Technology, encouraging governments to leverage cloud technology to build more resilient infrastructure, manage subrecipient grant issuance programs and serve sheltered-in-place residents more effectively. Now I am closely following the developments in the new administration’s effort to pass the American Rescue Plan, and trying to help everyone keep up with this rapidly developing federal action.
Congress is moving quickly to match the President’s pace to bring the country out of the grip of this pandemic. Early Friday morning, the Senate approved the funding for Biden’s plan and the House of Representatives signed off hours later. On February 9th, the Chief Financial Officers and Finance Directors of 30 of America’s largest municipalities wrote to the President. Their three-page letter said in part:
“. . . Throughout this pandemic and accompanying economic crisis, cities have taken an outsized leadership role in the design and implementation of measures and programs to aid our residents and maintain a strong economy. . . the pandemic and economic crisis have disproportionately affected our most vulnerable residents. Local governments, which work with these populations most directly, are in great need of additional resources.
As you are aware, the crux of the challenge facing cities is that demand and need for core local government services has increased significantly over the last year. At the same time, cities have realized unprecedented levels of revenue loss due to the economic impact of the pandemic and measures required to maintain public health. Funds allocated to local governments from the Coronavirus Relief Fund helped to ease some of this burden and to address our most urgent needs in fighting this crisis. However, significant challenges remain.
Given the long-term reality of the pandemic, flexible, sustained, and direct funding is paramount – particularly, funding for local governments. . . The stress placed on cities’ operating budgets over the last year has been nearly entirely due to the economic fallout of the pandemic. These budget shortfalls . . . have real and serious consequences . . . We would like to offer several recommendations as you work to develop existing and future program guidance. .
Funding Economic and Equitable Outcomes. . . . stimulating local economies. We strongly support providing local governments additional flexible funding in the following areas, including a small amount for future-focused innovation funding: education support; public health management; resilient infrastructure needs; small business aid; direct assistance to individuals and families; food security; housing and homelessness assistance programs; and tourism and visitor industry aid.”
I would note that OpenGov is in the business of resilience. Our cloud ERP Platform operates outside the government’s IT infrastructure, It is maintained, secured, and supported by OpenGov experts, It can be operated anywhere the Internet reaches, facilitating internal operations and public interfaces with local government technical support.
At OpenGov we are excited to see these municipal finance leaders, as well as NACo and the Government Finance Officers Association (GFOA), actively engaging on this critical Covid-19 pandemic and economic relief legislation. Both organizations issued guidance to their member governments today. They are encouraging local legislators to contact their congressional representatives and express their support for this important bill as it moves through markup and passage in the House, then the Senate, and hopefully presidential signature by March 14.
Last year we saw many OpenGov customers use Covid Relief Fund (CRF) monies from the CARES Act to put the advanced capabilities of our modern Cloud ERP Platform to work. The OpenGov ERP Cloud played a mission-critical role in meeting the sudden and unanticipated demands placed on local governments in these difficult times:
Our customers are:
- Helping their local economies rebuild: Middlesex County, NJ manages programs awarding CRF grants to local cities and non profits; Hempstead, NY built virtual permitting workflows to support business owners; and St. Pete’s, FL deployed $6.2 Million in individual and business grants with OpenGov Citizen Services.
- Building resilient budgeting infrastructure: Harford County, MD stayed on track with its budget even with a move to virtual with OpenGov Budgeting & Planning.
NACo and GFOA are encouraging legislators and the Treasury to simplify the administrative rules and allow broader use of the new round of relief funding, including emergency response costs, replacing lost revenues, and countering negative economic impacts. The draft legislation includes direction to distribute funds within 60 days and the elimination of a legislative end date on the funding. Access is to be a simple application to Treasury – not a complex spending plan or narrative process.
We encourage local governments to begin planning now for this funding. The pandemic is not over, and the economic recovery may be stalling. Millions of families are out of work, food-insecure, and at risk of homelessness. Residents look to their local government leaders for help. Your teams need every advantage you can offer them in operating efficiency, responsiveness and community alignment.
Category: Government Finance