Conference Presentation, Panel, Fireside Chat
Silver Linings Playbook: New Momentum for Outcomes-Driven Government
Milken InstituteMatt Horton, Ben McAdams, Jennifer Park, Nancy Augustine, William Glasgall, Michael Grossman, Michael Hammett, Grace Simrall, Ryan Smith, Jen Tolentino
- Intergovernmental Collaboration Framework: The National Academy of Public Administration established the Center for Intergovernmental Partnerships in September 2024 to address systemic disconnections between federal, state, and local agencies, aiming to spur innovation by identifying bottlenecks in program implementation.
- Strategic Initiatives Identified: The Center is launching three primary projects: analyzing state regulatory compliance processes during the pandemic; addressing workforce shortages in the Infrastructure Act era through replicable partnerships; and reforming social service delivery via a "No Wrong Door" universal gateway model to replace fragmented, waiver-dependent systems.
- Federal Funding Scale and Risks: The Volcker Alliance reports the federal government typically transfers $800 billion annually to state and local entities in a fragmented manner, creating a "fiscal cliff" risk when American Rescue Plan Act (ARPA) funds expire between 2024 and 2026, with at least 18 states already allocating funds to revenue replacement.
- State Budget Metrics and Trends:
- Reserves: State rainy day funds reached nearly 8% of general fund revenue in 2019, with projections hitting a record 10% for 2021-2022; approximately 20 states now index reserves to revenue volatility.
- Deferred Maintenance: There is an estimated $1 trillion in unfunded deferred infrastructure maintenance liabilities across states, comparable to pension underfunding, which remains a critical gap for ARPA and Infrastructure Bill spending.
- Performance: 2021 public pension gains ranged from 20% to 40%, though volatility remains a concern; budget forecasting processes have improved, though accuracy gaps persist.
- Outcomes-Based Financing Models: Social Finance is deploying "Career Impact Bonds" and "Pay It Forward Funds" to finance workforce development, utilizing income-share agreements that require zero upfront costs for students and recycle capital as participants' incomes rise to multiply funding availability by 2x to 3x.
- Municipal Data and Innovation Adoption:
- Trend: The percentage of cities engaging residents on goals or communicating progress has tripled, while the percentage modifying programs based on data analytics has more than doubled over the last five years.
- Capacity: 50 cities have achieved "What Works City" certification, with hundreds more utilizing data infrastructure to drive equitable budgeting and procurement decisions.
- Louisville Metro Digital Inclusion: The city launched the "Speed Up Louisville" crowdsourced speed test to identify connectivity gaps, pre-qualifying over 1,000 families for low-cost plans and rapidly scaling to 25,000 households enrolled in the free Emergency Broadband Benefit program by utilizing established data channels.
- Durham Public Safety Reform: Durham addressed suspended driver's licenses for unpaid tickets—affecting over 40,000 residents, 80% of whom are Black or Latinx with an average suspension age of 16.5 years—by waiving over $2.7 million in debt for 35,000 residents without an application process to avoid exclusion errors.
- Phoenix Climate Resilience: The city is piloting "cool pavement" coatings on 38 square miles of roadway, demonstrating a 10 to 12-degree temperature reduction compared to traditional asphalt, alongside a new Office of Heat Response and Mitigation to address equity gaps where underinvested areas lack shade cover.
- American Rescue Plan (ARP) Spending Patterns: Analysis of 150 jurisdictions indicates only 42% utilized funds for revenue replacement, contrary to fears of mass reliance on this option; significant allocations were directed toward public health, infrastructure (broadband/sewer), housing, and workforce development with a strong emphasis on evaluation components.
- Budget Transparency Tools:
- Phoenix launched "Fun Phoenix," a gamified digital tool allowing residents to adjust budget allocations and balance trade-offs to inform policy.
- Louisville's Enterprise Performance Management System employs a "weakness orientation," requiring departments to publicly measure gaps rather than just successes to drive continuous improvement.
- Durham is implementing "Stats in Action," a participatory research model where community members help analyze public safety data to design crisis response services.
- Future Outlook and Replication: Panelists emphasized a shift toward normalizing the risk of innovation failure and prioritizing the adaptation of successful municipal solutions across different jurisdictions to avoid reinventing the wheel, with a specific focus on using ARP funds to build long-term data and evidence capacity rather than one-time fixes.