Dec 20 2021

How State and Local Agencies Can Make the Most of ARPA Funding for IT Modernization

Government officials and agencies are still trying to determine how to best make use of American Rescue Plan Act funds

Months after the passage of the American Rescue Plan Act and after roughly $350 billion in funding for state, local, territorial and tribal governments started flowing, many government agencies are still figuring out how to make the best use of those dollars.

This is understandable, since governments have until the end of 2024 to allocate the funds. Many state and local governments have also hesitated on assigning funds as they monitor the continuing development of the coronavirus pandemic.

The interim final guidance for the law offers some clarity on how the funds can be spent. Specifically, they can be allocated for government services, such as “modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.”

State and local IT leaders, in close consultation with elected leaders, should be evaluating the law, their needs and how the funds can best address them. However, they also must think about the long-term implications of starting new programs and undertaking new technology initiatives, and ensure that there will be adequate funding sources to sustain them once federal funding has been used up.

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How Governments Are Using ARPA for IT, Broadband

State and local governments have significant flexibility in deploying ARPA funds. While much of the funding will go to projects that do not have a direct IT connection, some state and local governments have already allocated funding for technology-related projects.

As StateScoop reports:

Virginia plans to spend $20 million on digitizing health records; Colorado put $35 million toward digital inclusion programs; and Indiana will pour $1 million into an “internet of things” laboratory.

New Hampshire CIO Denis Goulet tells StateScoop that the state will use $30 million to invest in upgrading the state’s technology architecture and digital citizen services, including the rollout of software-defined networking.

States are also using ARPA funds to expand broadband access. As the Pew Charitable Trusts reports, California, for example is using “$3.25 billion for the Department of Technology to oversee construction and subsequent maintenance of a statewide open-access middle-mile network and $500 million for the Public Utilities Commission to oversee last-mile projects.”

RELATED: What are the top state and local IT trends to watch in 2022?

Montana has also “appropriated $275 million of its ARPA money to a new effort to fund communication projects related to broadband infrastructure, which the legislation says could include cell towers or public safety improvements.”

State and local agencies are also investigating using ARPA funds to improve the delivery of government services via revamped IT help desks to aid constituents and provide timely information and updates on COVID-19, for example.

State and local agencies can and should consider using ARPA funds to improve their cybersecurity architecture. Cybersecurity remains one of the top IT priorities of state CIOs, according to the National Association of State Chief Information Officers. Governments should take this opportunity to bolster more than their cybersecurity posture.

EXPLORE: How can state CIOs encourage broadband expansion?

Best Practices for Long-Term Government IT Investment

While the infusion of funds is certainly welcome for state and local governments, IT leaders and government officials need to think strategically about ARPA funds.

They need to think about new projects they are using ARPA funds for — whether it’s broadband, new digital government services or new IT architecture — and how those projects will be funded not just in the first three years but in years four, five and six.

The funding might provide a sugar high right now, but as technologies age, they tend to get more expensive to maintain. Governments must make sure they will have adequate funding streams to sustain newly created programs, otherwise their value will be short-lived.

This includes everything from personnel to extended warranties for equipment and long-term patching for cybersecurity.

ARPA represents a major opportunity for state and local governments to invest in broadband, new digital services and tools to make the delivery of government benefits more efficient. They should not waste their chance — and should also plan for the future.

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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