Published on August 14th, 2020 📆 | 6880 Views ⚑0
How Technology Can Help With Government Revenue Enhancement
Paul Colangelo is CEO of Avenu.
Local governments are in a budget crunch this year. Covid-19 has simultaneously decimated many municipal revenue streams and intensified the demands on local governments to provide effective public services. It’s a potentially devastating combination of falling revenue and increasing expenses. The National League of Cities estimates there will be up to $360 billion in revenue shortfalls for local city governments between now and 2022.
But for governments stuck in a pinch after the economic fallout of Covid-19, new technology offers a way out. Digital processing and automated revenue management technologies can dramatically enhance government revenue while streamlining daily operations — providing cash-strapped governments with the means to succeed even under the most challenging of economic conditions. And beyond the budget, new technology creates a space where the private and public sectors can work hand in hand for the greater good of constituents.
Digital and automation technologies work by maximizing the revenue collected from already-existing revenue streams. Many local governments have appreciable sums of untapped and undiscovered revenue hidden behind opaque internal processes, high operational costs and misallocated labor costs. Technology can access this hidden revenue by providing more effective and faster revenue collection.
Electronic automation also makes government more efficient without making it more burdensome. That’s because tech-driven revenue management can generate revenue windfalls without requiring unpopular tax hikes or the levying of additional fees. At a time when a lot of constituents are hurting financially because of Covid-19, this emphasis on better revenue management, rather than on additional outside revenue sources, is the right way to take public sentiment and needs into account.
But automated revenue management is just one piece of technology among many. Data analytics is another. Good government, like an effective operation in a digital age, relies on good data. Many automated systems available today provide interactive 24/7 reporting tools that governments can use to monitor their financials in real time, providing a fast and largely error-free way to gather vital information about funds allocations and the impact of budgeting decisions. Advanced data analytics tools can also help governments monitor the situation of their constituents and take a more proactive approach to problem-solving their constituents’ needs.
Even simple changes like offering your government services on an online website can make a huge difference. In the wake of Covid-19, many constituents and government employees are understandably worried about in-person meetings at the DMV, courthouses or other government offices. Turning in-person processes into digital ones can not only mitigate those worries, but it can also ensure constituents still have easy access to vital government services during this pandemic and can generate additional revenue by making payments and compliance simpler and faster.
To give just one example: Fifty-eight percent of constituent-facing processes in the public sector still rely on paper processing, an internal procedure with high operational costs, low data transparency and increased likelihood of errors. By digitizing their records and adopting new data and analytical tools, governments can often unlock revenue that would otherwise get lost in the paper piles. And when combined with automation technology, digital processing can free up a lot of labor time for more essential, and more difficult, tasks.
If business licensing can all be done online, for example, then the simpler payment process will ensure greater compliance from businesses, as well as faster turnaround on payments and easier fee collection. All told, that means more revenue for governments and more satisfaction from constituents.
For government workers under pressure from the pandemic, new technology might be the last thing on their minds. Most jurisdictions are already too occupied with providing quality services to constituents right now, and they often just won’t have the spare labor and capital to develop new tech infrastructure. But governments don’t have to make their digital infrastructure upgrades and technology updates on their own. Public-private partnerships can help governments update the technology behind their systems.
Public-private partnerships can offload the responsibility for tech changes to private-sector companies specialized for the task, allowing governments to stay focused on constituents. And for governments worried about costs at a time when money is already tight, many private sector tech solutions are self-funding, meaning that the increased revenue they generate pays for the cost of installing them.
Governments that make the most of their revenue streams can do the most for their constituents. And in our increasingly tech-driven world, putting technology in the driver’s seat of government revenue management can ensure that governments stay connected with their tech-savvy constituents. New technology will define good governance, both during the Covid-19 crisis and beyond.