Panel: Funding battles ahead for state IT initiatives

Despite strong revenue growth across state government in recent years, funding for information technology will face increasingly stiff competition with other formidable priorities over the next several years.

State technology initiatives will vie with high-profile priorities related to health care, education and transportation, said members of a state fiscal forecast panel today at the National Association of State Chief Information Officers midyear conference in Chantilly, Va.

"The competition for dollars continues to be incredibly intense," said Scott Pattison, executive director of the National Association of State Budget Officers.

State revenue growth was strong and stable in both fiscal 2006 and 2007, but will slow in fiscal 2008, Pattison said.

"We've had a very strong run over the last five years," added Ray Scheppach, executive director of the National Governors Association.

One sign that the states are doing well fiscally is that they have not had to make cuts to governors' budgets after they were approved by the legislature as they have had to do in leaner years, said Bill Pound, executive director of the National Conference of State Legislatures.

Pound said that certain spending decisions related to health care and other issues threaten to create substantial budget challenges for states in fiscal 2009 and 2010. He and other panel members noted that several New England states are experimenting with "universal" access to health care within their borders and this could pose budget challenges. Somewhere between 15 and 18 other states are interested in pursuing similar initiatives, Scheppach said.

State legislators are chiefly concerned with functionality and privacy of IT projects, and therefore most of their legislative efforts are directed at these matters, Pound said.

He also noted that one of the toughest challenges for state government is the implementation of large databases that don't seem to work well and draw media attention as a result.

Because the financial savings projected for major projects don't always materialize, Pattison suggested that government and industry IT partners should emphasize service rather than savings when proposing new technology initiatives to governors and legislators.

"You need to build out incrementally large projects with benchmarks [and] show you are improving service in a substantive area," Pattison said.