As 2005 draws to a close, a note of optimism has crept back into public-sector IT conversations. After years of relentless cost cutting, the idea that technology can do things beyond save money -- important things, such as improve health care, educate children and spur economic development -- stirred once again.

The trend was powered by a mix of good and bad news.

On one hand, the tight budgets plaguing governments loosened a bit, with a handful of states even reporting revenue surpluses this year. Furthermore, multiple rounds of consolidation really did squeeze significant expense from government IT operations. So state and local governments not only began breathing easier, some also started considering what to do with their newly strengthened and standardized technology foundations.

That bit of good news dovetailed with the sobering notion that challenges facing all levels of government are simply too large to solve without an unprecedented amount of IT-powered reform.

Meeting the Challenge

If comments from the National Association of State Chief Information Officers (NASCIO) annual meeting in October were any indication, government CIOs seem ready for the task.

California CIO J. Clark Kelso acknowledged a laundry list of critical issues facing public officials, then confidently predicted that IT would help solve them.

"I can't dispute the demographics, but let's be optimistic," said Kelso. "Health-care costs look bad -- but other countries have solved it. We will too, and IT will help.

"Revenue looks bad, but ultimately we'll figure out how to tax knowledge transactions," he added. "IT can't fix these problems alone, but IT has to be involved in the transformation. And the transformation will happen because the public expects it to happen."

Former Washington CIO Steve Kolodney, widely considered the godfather of e-government, predicted growing IT interest among elected officials and policymakers.

"All the talk has been about consolidation and cost cutting, but I think that's about to change," he told NASCIO attendees. "There's a wave building that's pushing state and local officials toward the idea that something profound needs to happen."

Spiraling health-care costs, global economic threats, and citizen demands for efficient and accountable government all conspire to put technology back on the front burner for politicians, said Kolodney.

"Changing government will become a key campaign issue," he said.

Turning Up the Heat

The idea of using technology to change government started to play out in several ways during 2005.

Michigan Gov. Jennifer Granholm made technical innovation the cornerstone of her plan to revitalize the state's moribund economy.

California Gov. Arnold Schwarzenegger included a healthy dose of IT reforms in his California Performance Review, a high-profile study of state government operations.

And rumors are swirling that Virginia Gov. Mark Warner -- who compiled a stellar list of IT accomplishments during four years in office -- may make a presidential bid in 2008.

At the local level, the mayors of Philadelphia and San Francisco launched plans for citywide wireless networks designed to support government operations, and give citizens and businesses low-cost Internet access they deem vital to economic success. Now it's up to CIOs such as Philadelphia's Dianah Neff to make these visions a success.

As IT projects reclaimed a higher profile, however, they did so with a crucial difference: This time the technology is grown up. The dot-com boom of the late 1990s spawned e-government projects motivated by the novelty of being online; today's governments are better at using technology to meet real requirements.

Now when technology leaders such as Michigan CIO Teri Takai, New York City CIO Gino Menchini and Texas CIO Larry Olson talk about technology, they do so in terms of achieving policy goals or business outcomes -- and

Shane Peterson  |  Associate Editor