State & Local IT Spending Will Regain Traction After Tough 2009

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Industry forecast to be delivered at INPUT’s 3rd Annual State & Local MarketView conference.

INPUT

We still have a number of drivers within this market that are virtually recession proof

Due to depressed sales taxes as a result of declining housing prices, fiscal year (FY) 2009 will be the toughest year for state and local government information technology (IT) spending over the next five years, according to INPUT, the authority on government business. This will be the year when most IT departments will suffer from government-wide budget cuts and reduced fees from service to client agencies. (For most states and localities, FY 2009 runs from July 1, 2008 through June 30, 2009.) This and other insights on the state and local government IT market will be delivered at INPUT’s 3rd Annual State & Local MarketView event on June 4, 2008 at the Westin Tysons Corner.

“The worst of the budget cuts will be passing through in the coming fiscal year,” said Chris Dixon, manager, state and local industry analysis for INPUT. “Even states without major deficits, like North Carolina for example, are making necessary adjustments now to fend off a full-blown crisis. IT departments will have to share some of the pain next year, if only for symbolic reasons. However, at the end of the day, budgets cannot be balanced on the back of IT. Medicaid cuts, sin taxes, payroll and benefits adjustments, and tuition hikes are at the heart of the matter.”

INPUT remains optimistic about the prospects for health IT throughout the period as states scramble to contain Medicaid costs and prepare for the retirement of Baby Boomers. Justice/Public Safety and Homeland Security will remain active in response to the rising costs of prison systems and the ongoing effort to establish interoperable communications systems. In Social Services, states will continue developing child support enforcement (CSE) and child welfare information systems (SACWIS).

“We still have a number of drivers within this market that are virtually recession proof,” said Schalene Dagutis, vice president, state and local information services for INPUT. “This is a good time for determined vendors to weather the storm and outlast some of their fair-weather competitors. Government IT leaders will remember who was there for them in tough times. Vendors simply need to have a two-tiered business-development strategy with appropriate approaches and timelines for customers in good and bad financial circumstances. Vendors with a one-size-fits-all approach will struggle to gain traction.”

The day-long MarketView event will lead off with a keynote by George Newstrom, former Secretary of Technology for the Commonwealth of Virginia and current President and CEO of Lee Technologies, who will be providing unrestrained insight into how vendors can make the most of a down period such as this. Dixon will provide a market forecast running from 2008 through 2013. Additional topics will include health IT advances, the “greening” of IT, transparency, a homeland security grants outlook, and insights from active state and local government IT leaders.

INPUT’s 3rd Annual State & Local MarketView event can be found online at http://www.input.com/corp/events_conference/20080604_SL-MV08-east.cfm .

EDITOR’S NOTE: For additional event details or an interview with event participants, please contact Helena Brito at hbrito@input.com or 703-707-4161.

About INPUT
INPUT is the authority on government business. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 1,300 members, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information about INPUT, visit http://www.input.com or call 703-707-3500.

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Helena Brito
INPUT
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