Survey reveals US cities’ stimulus spending priorities

A new survey finds that local government priorities for the newly passed COVID-19 relief funds are public health safety measures, purchasing PPE and covering payroll. This is roughly in line with how 2020 support packages have been used but new trends for future spending have also emerged.

CivicPulse, a non-profit local government research organisation, surveyed 494 elected policymakers and appointed officials from counties, cities and townships across the United States in January and February 2021 to understand the current status of relief funding, how funds had been used so far, and where additional funds would be spent once passed.

The results shed light on how cities are likely to use their share of the US$350 billion in direct aid to state and local governments granted under President Biden’s recently passed US$1.9 trillion American Rescue Plan.

As well as payroll and health measures, many government officials indicated that they would be likely to use new funding to support small businesses (47 percent) and cover the costs of vaccine distribution (31 percent).

The report finds that 37 percent of local governments still plan on spending some of the 2020 relief funding they received through the US$150 billion Coronavirus Relief Fund. The support was provided to states, counties and cities with populations over 500,000 under the CARES Act.

IT infrastructure spending

Thirty-three percent of respondents said they would invest new funding in IT infrastructure, down from 50 percent who used 2020 funds this way. Local officials from the areas with the smallest populations were the most likely to indicate that they might spend additional funds on IT infrastructure. This could indicate that larger governments are more likely to have already made the technological upgrades to provide services in a virtual world, but smaller governments still need funding to adjust.

A fifth could use some of the new money towards broadband expansion, down from nine percent in the previous round. This reflects a growing commitment to get more citizens connected as everything from education to work and shopping has become increasingly remote during the pandemic.

“With billions of dollars being given to local governments to help them with their budget shortfalls, we now have a sense of the high-need areas where these funds will be spent,” said Nathan Lee, Managing Director of CivicPulse and a professor in the Department of Public Policy at the Rochester Institute of Technology.

“So much attention has been given to how this new round of relief funding will affect the state budgets, but those conversations often ignore the tens of thousands of local governments across the country that are also looking at budget deficits and have far fewer resources available to close those gaps.”

Image: Palinchak | Dreamstime.com