May 12 2021

How to Best Use Federal Funds for State and Local Modernization Efforts

Investing in cloud-based infrastructure and tools for hybrid work will allow agencies to get ahead.

State and local governments started to breathe a little easier in March when President Joe Biden signed the American Rescue Plan Act into law. The law includes $350 billion in total funding for state, local and tribal governments, which have been battered by revenue losses during the coronavirus pandemic.

As the National Association of Counties notes, governments can use the funding for a variety of purposes, including responding to or mitigating the pandemic or its negative economic impacts; providing government services to the extent of the locality’s reduction in revenue; and making necessary investments in water, sewer, or broadband infrastructure.

Indeed, as experts from the Brookings Institution note in a blog post, “the investment opportunity is magnified by the fact that the funding for state and local governments appears to be incredibly flexible, and therefore even more supportive of innovative recovery solutions.” Importantly, the funds can also be used over the next three years.

The temptation for many state and local governments might be to simply use the funds to plug budget gaps. While that will surely occur in many places across the country, the funding influx also presents an opportunity for state and local governments to modernize their IT infrastructure and government service delivery. Additionally, governments can use this moment to retool for long-term hybrid work and make themselves more attractive to a wider and more diverse talent pool.

Making Government Services More Modern and Dynamic

The pandemic exposed the fragility and cumbersomeness of certain legacy government applications, most notably unemployment insurance systems. However, it also highlighted the need for government agencies to transition a wide range of applications and services to mobile- and web-friendly apps that citizens can access remotely without having to schlep down to a government office.

“I think it’s going to go down as a historic pivot point for government’s digital transformation,” Bill Eggers, the executive director of the consulting firm Deloitte’s Center for Government Insights, tells StateScoop. “From telehealth to telework, virtual courts, virtual education, rarely in modern history have we seen so many large-scale experiments of government that were rolled out so quickly at such a massive scale.”

To build on this moment and continue to deliver innovative services, agencies should invest in their cloud infrastructure, modern application development and make sure their services are mobile-friendly and have elegant user experiences.

New Hampshire CIO and National Association of State Chief Information Officers President Denis Goulet is someone who also thinks the time to strike is while the iron is hot.

In addition to investing in cybersecurity and broadband expansion, Goulet recently advocated for state governments to use their new federal funding for legacy IT modernization.

“States should invest in cloud services for these modernization efforts, which reduce complexity, enhance security and ensure that no unused services are kept active,” he writes in StateScoop. “While this may be more difficult in less centralized IT environments, operating systems that continue to rely on outdated technologies simply cannot meet the future demand for increased digital services and the delivery of critical services and benefits to our citizens.”

State and local governments have a unique opportunity right now to not just get back to where they were pre-pandemic but to build out the modern digital infrastructure that will support 21st-century government services. Citizens have grown to expect government to meet them where they are and when they want, and agencies should be working to meet those expectations. If they can show that government can work, citizens will likely be more appreciative of government and in turn, will support further investment.

EXPLORE: Learn why improving online experiences is key to digital government.

Building an Attractive Hybrid Workplace for Government

In addition to modernizing infrastructure and citizen-facing services, state and local agencies can use this opportunity to modernize how they operate internally.

Few people go into government service thinking it will be a glitzy option, especially for IT workers when compared with a job at a major tech firm. However, as a result of the pandemic, government agencies are now at the forefront of employers experimenting with and adopting long-term hybrid work models.

To attract and retain public sector employees, agencies should continue to invest in cloud-based collaboration and videoconferencing tools, as well as in chatbots and other tools that enable a more remote workforce. Agencies can reinvent and innovate around what it means to work in government and alter the core organizational infrastructure of government.

Smart agencies won’t adopt hybrid work models to stay afloat but to become more attractive to workers. Imagine being able to work for a state government but not having to move to the capital city, or only having to commute one or two days a week. That kind of flexibility will allow agencies to attract from a wider and more diverse group of potential employees. Hybrid work will be the kind of perk that never existed on such a large scale in government.

The pandemic has been devastating in so many ways in communities across the country and the world. A bright spot is that the recovery could allow state and local agencies to invest in the future, if they are able to seize the moment and make the most of it.

This article is part of StateTech’s CITizen blog series. Please join the discussion on Twitter by using the #StateLocalIT hashtag.


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