Analysis: States protecting IT budgets from shortfall
- By William Welsh
- Sep 25, 2002
State officials have not significantly reduced planned spending on information technology programs, despite a $22 billion budget shortfall in state governments across the country, according to market research and consulting firm Input Inc. of Chantilly, Va.
"States have been aggressive in finding alternative ways of addressing their budget shortfalls rather than through sharp reductions in program budgets," said Suzy Haleen, a state and local analyst at Input. "As a result, many of the capital investments and IT expenditures planned by states have been minimally impacted," she said.
States are using several techniques as alternatives to cutting program budgets, according to Input. These include raising taxes, using so-called rainy day funds and transferring funds to meet their budget deficits.
Shortfall estimates vary. Input puts state budget shortfalls at about $22 billion, while the National Association of State Budget Officers estimates shortfalls totaling $40 billion.
A detailed analysis of budget cuts put in place by the governments of Virginia and Maryland shows some program areas, such as transportation, have remained largely untouched.
"States remain committed to investing in IT as a way of reducing costs long term, but it is more important now than ever for vendors to be aware of the environment the states are in so they can focus and plan their sales strategies effectively," Haleen said.
William Welsh is a freelance writer covering IT and defense technology.