INPUT: Stimulus Drives $4.5B in State and Local Technology Spending Senate compromises are unlikely to cut technology investments Reston, VA (Vocus) February 12, 2009 State and local government technology contractors will find $4.5 billion dollars worth of opportunities in the American Recovery and Reinvestment Act (ARRA) as passed by the U.S. House, according to INPUT, the authority on government business. The U.S. Senate version will reduce spending in the areas of education, law enforcement, and unemployment insurance. However, it will increase spending in the areas of broadband and health IT. Overall, INPUT projects $4.5 billion of technology spending, which is 9 percent of the grants with a technology component. "The broadband rollout represents the largest portion of the likely state and local technology investment in both versions of the bill," stated Chris Dixon, manager of state and local industry analysis with INPUT. "Investments in facilities modernization, mass transit, and health IT will also drive technology spending at these levels. Both of those priorities look to survive draft versions of the Senate compromise relatively unscathed. In fact, the Senate version, as it stands now, is more likely to increase the state and local technology spending by $1 billion dollars." "Fortunately for technology contractors, information technologies are integral to any modernization of public facilities--including schools--and mass transit systems," said Dixon. "Increased security and efficiency is the key in these areas, and both are technology intensive outcomes. The same is true for health IT, where funding in both bills will drive significant investments for public safety net hospitals and clinics as well as Medicaid Management Information Systems." Current drafts of the Senate compromise legislation point toward an $80 billion reduction to the stimulus package and a minor shift toward tax cuts versus direct spending. Most of the cuts to state and local grants come in the areas of direct budget assistance to states for education, law enforcement, and unemployment insurance. Since none of these grant categories are likely sources for technology spending, reductions are unlikely to affect INPUT's initial estimates. Contractors can stay informed about the stimulus package by visiting INPUT's Economic Stimulus Knowledge Center at http://www.input.com/corp/knowledge_center/economic-stimulus.cfm?cmp=OTC-mrsleconstmls020909] and B2G Breaking Views blog at http://www.input.com/blogs/public?cmp=OTC-mrsleconstmls020909. EDITOR'S NOTE: To speak with an INPUT analyst, please contact Helena Brito at hbrito@input.com or 703-707-4161. About INPUT
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