The U.S. Treasury Department recently released the first allocation of the American Recovery Plan Act’s (ARPA) $350 billion earmark of flexible aid to state and local governments to help buoy their budgets. As state and local governments consider how to invest those funds, evaluate their impact, and report on program performance, leaders are facing some pressing challenges.
First in importance is accurately assessing local need to make smart decisions around resource allocation. Figuring out where to spend aid dollars and generating support for those decisions can be difficult.
There is also a significant amount of pressure that comes with a new funding opportunity. This is a once-in-a-generation chance to modernize traditional service models and, in doing so, create more equitable communities in which all residents have fair access to government information and services. The onus is on governments to use these funds in a transformative, forward-looking way.
Finally, once agencies begin to spend, leaders must measure performance to show that recovery policies are working. When spending does not return desired results, leaders need to quickly pivot and adjust. Furthermore, new reporting and compliance requirements accompany ARPA funds. This point is particularly important as the first interim reports regarding expenditures are due to the Treasury on August 31.
To meet reporting guidelines and overcome these challenges, leaders should leverage data — both from their own operations and from third-party sources. While third-party data is not typically used in the context of measuring program efficiency, in the case of ARPA funds, it can prove extremely useful for enhanced insight. In addition, reporting on spending and its effectiveness is simplified by unifying administrative and independent commercial data and surfacing it in intuitive, user-friendly dashboards.
Following are four ways data can help advance every state and local government’s ARPA programs.
1. Identify the most impacted industries and communities.
There has been wide variation in the economic impacts of the pandemic and the most adverse consequences have been concentrated in particular industries and geographic areas. Policymakers need a granular understanding of which segments of their jurisdiction have been most severely affected so that they can target ARPA-funded economic development programs to those neighborhoods and industries most in need.
Granular third-party data is particularly useful in highlighting concentrations of economic distress. For example, small business revenue data from data providers like Womply can be used to show those industries that have suffered the most severe revenue losses as well as the Census tracts where the most adversely affected businesses are located.
2. Evaluate impact of ARPA funded programs in real time.
Any ARPA-funded economic recovery intervention needs to be rapidly evaluated to ensure that it’s achieving intended results. If programs are working, they should be scaled; if they’re not, resources should be reallocated to more effective programs.
Data is indispensable for rapid evaluation. State and local government leaders should look to their own operational data to calculate output (or program productivity) metrics such as numbers of businesses assisted, or numbers of workers trained. But even more so, they need good independent data sources that allow for the tracking of outcome measures, such as increased business revenues, consumer spending and online traffic.
To analyze these outcome metrics, state and local governments should look to timely, granular third-party data sources. Insights from these data are increasingly available to state and local governments and can be leveraged to make near real-time adjustments.
3. Measure equity in recovery.
The United States entered the COVID-19 pandemic with already stark economic inequities drawn across racial, class, gender and geographical boundaries. The impacts of the pandemic threaten to increase those inequities.To address inequities head on, leaders need a detailed understanding of their jurisdictions’ economic conditions, so they can track recovery on a neighborhood-by-neighborhood, community-by-community basis.
Geospatial analysis is critical to providing an equity lens on economic recovery. Top-line measures on sales tax receipts, employment rates, and other economic metrics mask underlying complexities and nuances experienced by different communities. State and local leaders need granular data that can be broken out on a neighborhood-by-neighborhood basis. Modern third-party data from mobility and payments data providers allows for that disaggregated perspective.
4. Simplify ARPA compliance and reporting.
The ARPA requires state and local governments with populations 250,000 and above to create public reports accounting for how ARPA funds are spent and the performance of programs funded by those resources. These reports are likely to receive substantial scrutiny not only from the federal government but also from local entities.
To ensure that these reports are accurate, timely and high-quality, state and local governments should reuse the data leveraged in their day-to-day management in automated reports that anyone can view. If state and local governments concentrate on connected data needed for policy development, implementation, and evaluation, they set themselves up for success in creating high-quality automated reports required by the federal government.
Pierce County, Washington, for example, has already created an automated public ARPA performance report by surfacing financial data in an intuitive, web-based report. By investing in data to support operations, Pierce County has created an automated report at low cost as a byproduct.
Data is an essential force multiplier to the ARPA to state and local governments to help them prioritize recovery investments, evaluate programs, promote equity, and comply with federal reporting requirements. The federal government recognizes it, and in their Interim Final Rule, the Treasury Department makes it clear that investments in data technology themselves are eligible for ARPA funding. State and local governments everywhere should take this opportunity to invest in data for a smarter, equitable and effective economic recovery.
Meredith Trimble is a former municipal official and Town Council Acting Chair, who focused on strategic planning, annual budgeting and bonded infrastructure projects. Her government experience also includes posts in both federal and state-level executive branch agencies: Associate Editor of the Federal Election Commission’s FEC Record; and Director of Education for the CT Office of State Ethics. In her current role as a Content Manager, Editorial with Tyler Technologies, Inc., she writes content to help empower those who serve the public. Her current focus is to help facilitate data-enabled organizations and create connections between governments and those they serve.