State & Local DOGE Survival Guide: Navigating the Federal Funding Squeeze
At Esper, we partner with state and local governments every day to modernize how policies are drafted, approved, and maintained. In a moment when the Department of Government Efficiency (DOGE) is rapidly shifting responsibilities from Washington to the states, uncertainty can slow action and increase risk. This guide distills what we’ve learned working on the front lines of policy modernization so your agency can respond quickly, keep services running, and update every rule and procedure affected by federal pullback—confidently and in one centralized, searchable place.
1. Conduct a Rapid Impact Assessment
What to Do: Map out all federal programs that intersect with your agency’s responsibilities. Catalog their scope, budget, personnel, and key services.
Why It Matters: A clear, detailed picture of where federal cuts land allows for a data‑driven approach in deciding which services to preserve, modify, or phase out.
Technology Angle: A centralized platform (e.g., a modern policy‑management system) can consolidate and update policy data in real time, preventing blind spots as federal guidelines evolve.
2. Pinpoint Critical Services and Set Priorities
What to Do: Identify which services are essential for public safety, health, or economic stability. Classify them by urgency and importance so you can quickly allocate resources.
Why It Matters: Not all functions carry equal weight; limited budgets demand tough choices on what must be saved first.
Proof Point: Pennsylvania earmarked $664 million for DCNR to assume maintenance of more than 2 million acres of parks and forests that had relied on federal staffing and grant programs [1][2].
3. Reassess Funding Mechanisms and Revenue Streams
What to Do: Explore state and local levers—shifting allocations, emergency funds, grants, public‑private partnerships.
Why It Matters: Fitch Ratings warns that a potential 10–30 % reduction in federal Medicaid matching could create “material credit negatives” for state HHS budgets [5].
Technology Angle: Automated budgeting and forecasting solutions integrated with policy‑lifecycle management can surface fiscal pressures and options faster.
4. Coordinate with Regional Neighbors and Non‑Governmental Partners
What to Do: Form coalitions with neighboring counties, nonprofits, and regional agencies to pool expertise or co‑deliver services.
Why It Matters: Collaboration mitigates fragmentation when federal support vanishes. Oregon’s draft 2025‑27 framework, for example, sets aside a $100 million contingency fund plus $250 million for wildfire mitigation so partners can pivot together if federal dollars evaporate [3].
Technology Angle: A shared, cloud‑based policy platform keeps multiple partners aligned on guidelines, performance targets, and compliance requirements.
5. Streamline Internal Policy and Regulatory Processes
What to Do: Review administrative processes and approval steps. Eliminate redundancies to speed up decision‑making.
Why It Matters: Fewer federal resources mean state/local agencies must do more with less.
Proof Point: GovTech analysts note that thousands of state and local policies still point to federal procedures that are disappearing, creating an urgent need for searchable, centralized policy repositories rather than scattered SharePoint folders [4].
Technology Angle: Digitizing rule‑making and document workflows in a secure repository reduces bottlenecks and ensures real‑time updates.
6. Realign Workforce and Training
What to Do: Retrain or redeploy staff to cover newly inherited responsibilities (e.g., oversight formerly handled by shuttered federal offices).
Why It Matters: Colorado reports the loss of 90 U.S. Forest Service employees—forcing the state to take on wildfire‑prevention and trail‑maintenance duties at additional cost [6].
Technology Angle: Workforce‑management modules tied to policy platforms can track training needs and outcomes, helping leadership see how well staff are adapting.
7. Reinforce Transparency and Public Engagement
What to Do: Maintain open communication with residents, businesses, and community groups about upcoming changes.
Why It Matters: Public understanding and buy‑in smooth the transition from federal to state/local control.
Technology Angle: Policy management solutions with engagement capabilities increase trust and allow real‑time feedback.
8. Build for Long‑Term Resilience
What to Do: Develop a multi‑year roadmap that accounts for ongoing federal cuts, changing regulations, and future crises.
Why It Matters: Strategic, long‑term planning positions agencies to adapt without sacrificing essential functions.
Technology Angle: Comprehensive policy‑tracking platforms aligned with risk‑management tools enable leaders to pivot quickly as conditions change.
Underlying Theme: Why Policy‑Management Technologies Are Indispensable
As federal roles shrink, states and municipalities need faster, more coordinated responses. Digital platforms can:
- Centralize policy data and align it with evolving regulations.
- Automate routine tasks so staff focus on strategic work.
- Track performance metrics to spotlight effective interventions.
- Connect agencies and private partners under a shared framework.
By following these eight steps—rapid impact assessment, prioritization, funding restructuring, regional coordination, process streamlining, workforce realignment, public engagement, and long‑term planning—state and local leaders can blunt the fallout from DOGE‑driven federal cuts. Each step is strengthened by modern, cloud‑based policy‑management tools that make governance more agile, transparent, and ready for whatever comes next.
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Sources
[1] Parish, M. (2025, February 15). Shapiro’s $51.4B Pa. budget proposal aims to boost rural health, farms, and recreation. 90.5 WESA. https://www.wesa.fm/politics-government/2025-02-15/shapiro-pennsylvania-budget-rural-health-agriculture-recreation
[2] Parish, M. (2025, February 13). Millions earmarked to keep rural hospitals open, recruit health care providers in Shapiro’s $51.4B budget proposal. Spotlight PA. https://www.spotlightpa.org/statecollege/2025/02/pennsylvania-shapiro-budget-rural-hospitals-medicaid-medicare-health-care-agriculture-outdoor-recreation/
[3] VanderHart, D. (2025, March 19). Oregon budget writers offer up a spending framework — and a lot of uncertainty. OPB. https://www.opb.org/article/2025/03/19/oregon-politics-government-funding-budget-federal-money-spending-legislature/
[4] Morris, J., & Haisler, D. (2025, January 22). How new administration’s priorities will impact state, local government. Government Technology. https://www.govtech.com/policy/how-new-administrations-priorities-will-impact-state-local-government
[5] Fitch Ratings. (2025, March 21). DOGE, federal reforms and funding cuts could affect some US corporates. Fitch Ratings. https://www.fitchratings.com/research/corporate-finance/doge-federal-reforms-funding-cuts-could-affect-some-us-corporates-21-03-2025
[6] Alvarez, A. (2025, February 18). Federal cuts leave Colorado parks and forests vulnerable to wildfires. Axios Denver. https://www.axios.com/local/denver/2025/02/18/federal-cuts-colorado-national-parks-trump-administration
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