In response to multiple outlays of funds to help address the impact of the pandemic, states have used federal recovery funds for a diverse set of activities, including to replenish lost revenue, address negative economic impacts, and improve program outcomes. This diversity of uses reflects the extraordinary and broad-ranging impacts from COVID-19.

This report analyses how a shock to the system of this magnitude has impacted governments’ ability to use emergency dollars for public services, and draws on this analysis to develop recommendations for how states can use future recovery funds to help deliver key services during critical times of need. The report brings a broad-scoped analysis together with examination of three state-based cases, to explore how the alignment and effectiveness of funded activities are measured, and to identify lessons to guide states in deploying resources to address future transformational events.