State, local agencies will increase IT spending through 2015

State and local governments are projected to increase their spending on information technology systems and services by a compounded rate of 3.1 percent a year through fiscal 2015, according to a new report from Input Inc., a market research firm in McLean, Va.

State and local agencies are forecast to spend $61.5 billion in 2015, up from $52.8 billion this year, the report said, as new IT systems are used to increase productivity and to address growing demands for transparency and performance.

The report foresees a gradual stabilization of state and local revenue streams as the recession eases, along with a continued decline in federal economic stimulus funding.

One area where federal funding will continue to flow is for health-related systems.

At the same time, agencies are likely to increase spending on IT to dramatically improve productivity and to reduce labor costs for primary and secondary education, general government services and justice and public safety services, Input said.

The Obama administration’s focus on contract performance, transparency, reporting and accountability also is likely to drive some state and local IT investments, the report predicted.