Baltimore leaders have said hundreds of millions of dollars in pandemic relief approved last year is a historic opportunity for a city replete with need.
Mayor Brandon Scott has set high expectations for the city’s $641 million in funding from the federal American Rescue Plan Act, referring to potentially “life-changing” investments, while his office’s stimulus coordinator has pitched the money as a chance “to restore the lost faith in government” and “help change the trajectory of the city.”
But in a city with billions of dollars of needs, how can city leaders and residents rest assured that the money is being spent in the right places?
“It’s a big opportunity and one that cities could miss as easily as they could take advantage of it,” said Alan Berube, the director of Brookings Metro, a Washington, D.C., think tank. Berube, whose organization has been tracking ARPA spending in counties and cities across the country, said it behooves local leaders to lay out clear priorities and target a limited number of sectors where they can make a tangible difference with the money.
On the other hand, “not being clear” about goals from the outset, or funding a wide array of projects and spreading the one-time funding thin, “creates a risk that it’s just business as usual,” Berube said.
Though Baltimore has spent only a fraction of its $641 million so far — less than 7%, according to a progress report the city filed to the U.S. Department of the Treasury at the end of last month — more than three quarters of the money has already been earmarked. Under Scott’s leadership, funding has been divided between more than a dozen different spending categories. Commitments include stabilizing a budget shortfall from the pandemic, expanding broadband access, supporting small nonprofits, aiding in the revitalization of historic Lexington Market, and investing in violence intervention programs aimed at quelling crime, among a host of other projects.
Scott has stressed the importance of using the federal boost to support historically disinvested communities, and to advance five pillars he laid out in his Mayor’s Action Plan near the start of his administration: prioritizing the city’s youth, pursuing equitable neighborhood development, bolstering public safety, developing clean and healthy communities, and responsible stewardship of the money — a tenet that not all mayors have upheld in recent Baltimore history.
While the city has outlined high-level goals for the investment of its federal stimulus, Shamiah Kerney, director of the Mayor’s Office of Recovery Programs, said more explicit yardsticks for success remain a work in progress. Even as the city is developing its own metrics for success, Kerney, who is overseeing the distribution of the city’s stimulus funding, noted the city may not see the true impacts for years.
The ARPA administrator said she hopes residents in Park Heights will be excited about the new library being built with stimulus money — the neighborhood’s first in 20 years. Hopefully Baltimoreans will benefit from a restored Lexington Market with more women and minority venders, Kerney said, as well as grants for renovations at the homes of senior citizens, affordable housing initiatives, and increased funding to close the city’s digital divide and tackle crime with community nonviolence approaches.
“Those are the things that will tell us how well we did,” she said.
Building the plane while flying
Gauging the success or failure of cities’ American Rescue Plan spending is a tricky job, observers of local spending efforts around the country said.
Federal guidance for the program — which sent $350 billion to state, local and tribal governments nationwide — is unusually flexible, allowing local leaders to invest in areas where they see the most potential. One person might see the program’s chief aim as stabilizing the budgets of governments that lost hotel taxes, parking fees or other revenues when the pandemic shut down the economy. Another might want to see most of the money go towards the public health crisis caused by COVID-19, said Amanda Kass, a professor at the DePaul University School of Public Service who is researching ARPA spending at the local level.
“Those are two very different ways that you can frame the program and then evaluate whether or not it was successful,” said Kass.
But Baltimore is seeking to develop its own rubric for evaluating the success of its stimulus spending, partnering with researchers at Morgan State University and the University of Baltimore to aid and advise in the process.
It’s been a bit like “flying the plane while you’re trying to build it,” said Seema Iyer, associate director at the University of Baltimore’s Jacob France Institute and one of the city’s university partners. Iyer noted that requirements from the U.S. Department of the Treasury are extensive, calling for labor-intensive reporting that the city is conducting on top of its own performance measurements for individual projects.
As for overarching metrics of success, Iyer said her team has drafted three core questions for the evaluation.
First: “Did we recover from COVID?” The federal government deployed ARPA to help local jurisdictions build back from the economic and public health fallout of the pandemic, making that rebound central to the success of Baltimore’s investments, Iyer said.
Second, the city’s preliminary success metrics would examine how well ARPA spending advanced the five priorities laid out in Scott’s Mayor’s Action Plan.
And last, the criteria would account for the dent spending puts into longstanding inequities, like access to food, housing and careers. Iyer said the city is workshopping a definition of “equity” that evaluates spending by how much racial, geographic and life outcome disparities change.
Iyer and Baltimore officials have also run comparisons to the ARPA plans of other “peer” jurisdictions around the county, among them Detroit, a city less than 10 years removed from the largest municipal bankruptcy in U.S. history.
Like Baltimore, Detroit leaders see their $827 million as a one-time chance to create long-term opportunities for residents, said Meagan Elliott, the city’s deputy chief financial officer for development.
The city has devoted its funding towards varied projects, among them home repairs, child care support, city cleaning and a recreational “greenway” that will link neighborhoods around the city.
Detroit established a “North Star” for its spending — a kind of mission statement — to create a “resilient city with universally vibrant, safe, healthy and beautiful neighborhoods, providing equitable and inclusionary access to economic mobility and social prosperity.” To get there, the city outlined explicit goals for its investments and the stimulus program as a whole in its recent progress report to the federal government.
“In a city [where] you have like 300 emergencies at any given moment, it’s really hard to actually build in the infrastructure” for data-driven evaluations of city services, Elliott said. For Detroit, the wide-ranging ARPA program provides a fresh start for analytics that the city hopes to expand even after the money is exhausted, she said.
Other cities in Baltimore’s orbit have taken an entirely different approach to the federal funding. Philadelphia, which received roughly $1.4 billion from ARPA, has opted to put its entire allocation into its general fund to help replace an even larger five-year budget shortfall triggered by the pandemic.
The decision hasn’t been universally welcomed in Philadelphia, where the city controller has criticized a lack of strategy and published a lengthy counterproposal outlining investments in public safety, health and government efficiency, among other areas of urgent need. Still, Philadelphia Mayor Jim Kenney’s administration has argued that the funds are needed to maintain existing services in the city. Without it, “our communities would have absolutely no path to a fair, inclusive and equitable recovery from the pandemic,” Kenney said at a budget address earlier this year.
In Baltimore, officials overseeing the ARPA process have stressed the importance of taking time on the front end, prioritizing strategy over speed.
The goal, Kerney said, is to make targeted decisions that will improve the city and the lives of its residents in ways they can see and feel. In the short term, putting cash in the hands of a small-business owner so that they can provide jobs in the community is a win. But other markers of success may not be immediately clear.
“If we keep a business existing for an additional five years beyond ARPA, is that success? Or is 10 years success?” Kerney asked. “Those are the kinds of things that we’re still grappling with.”
Recipes for success
City officials and experts in urban policy all noted a central tension in the federal stimulus decisions for local jurisdictions, between the overwhelming scope of need in cities and the limited allotments they have to work with. It’s important to take the time to invest the money strategically, with an eye towards long-term impact, and be careful not to dilute funds across a city’s wide diversity of problems, many observers said.
“It’s a big chunk of change, $640 million dollars,” Berube said of Baltimore’s funding. “But that’s $640 million against a city of [586,000] people with deep, entrenched issues that are not going to be sufficiently addressed by $100,000 here and $100,000 there.”
Berube said his analysis runs at a lag behind federal reporting, and he couldn’t say whether Baltimore’s allocation is spread too thin. The city is similar to others around the country in having something of a “grab bag” of projects, said the Brookings researcher. But what makes Baltimore different is the “depth and severity of some of the issues it faces.”
“It’s one thing for Boston to spread the money around,” but Baltimore has more intense areas of need than some of its more prosperous peers, Berube said.
Bruce Katz, director of the Nowak Metro Finance Lab at Drexel University, similarly said he is “kind of agnostic” on where cities invest their money, since there are so many justifiable causes, but advised governments to “choose a few” where they believe they can make a noticeable dent.
“Do not just finger-paint all over the place,” said Katz, who served as chief of staff in the U.S. Department of Housing and Urban Development under President Bill Clinton. “Because it’s not gonna make a difference.”
Others pointed out that the flood of federal funding marks a golden opportunity for cities to steer their way out of intractable, decades-old problems by test driving new ideas.
Mitchell Weiss, a professor of management practice at Harvard Business School, said there is a “big existential question” in whether local governments truly take advantage of the federal windfall. While some point to risks that money will get guzzled up in waste or fraud at the local level, there’s a more pressing danger, Weiss argued, that cities will fail to capitalize on an opportunity for innovation and experimentation.
“We’re trying to change the trajectory of cities,” said Weiss, who previously served as the chief of staff to Boston Mayor Tom Menino. “The much bigger risk is that we fail to invent our way out of these problems.”
The most successful cities, Katz said, will be the ones who are able to leverage their federal money to draw in other investment sources, from the state level as well as business and nonprofit sectors. While cities’ biggest challenges significantly outweigh their federal allocations, drawing in other funding channels could create a “two-plus-two-equals-five effect.”
“That, to me, is victory here,” he said.