But there’s still a lot they don’t know.
“I think like almost everybody I've talked to, I just can't make heads or tails of it, partly because of the uncertainty and the whipsaw effect of the tariffs,” said David Edinger, CIO of Colorado.
Strategies include moving more quickly on hardware purchases that could see tariff-related price increases and re-prioritizing projects that are in the pipeline.
“We are planning to frontload some of our spend on the hardware side, things that are coming from overseas,” said Oklahoma CIO Dan Cronin. “We want to make sure that we're doing the right thing to protect the citizen dollars as much as possible before anything really kicks in.”
Layered on top of these considerations are individual budget circumstances at the state level. Here, Edinger describes the budget picture in Colorado and what it means for technology operations.
These realities bring changing expectations for how states work with the technology vendors they depend on to deliver on their missions. They need and expect true partnership, where the burden of changing economic circumstances is not the state’s to bear alone.
“It’s really about how do we avoid some of this inflation that we might get hit with,” Cronin said. “They've got to pass the cost somewhere, and we're hoping to find common ground and have a happy medium.”
There are some indications that this mentality is taking hold.
“I'm seeing signs of that,” Edinger said, “where they're coming to us and saying, ‘We're hearing rumblings about this no longer being cost effective for you, this product that we provide to you. And can we talk to you about different ways we might be able to streamline that?’”
Video transcript: In Colorado, we're facing a few challenges. We're facing state budget cuts as a result of the taxpayer bill of rights, so a billion dollars out of our $16 billion general fund budget has to be cut. Then you have all this federal uncertainty on top of it. So I think what it'll mean is we're going to have to start making those same kinds of hard decisions when we have a recession. Do we go to from three-year to five-year replenishment cycles? What do we try to spread the capital expenditures? But then when you do that, you see a rise in operating costs because now you have more people, you have to have more people on the phone and to do help desk support and that kind of stuff because your capital is deprecated and it's having an operational impact. And we go through, you know, whether it's COVID, a recession or now this, we're expecting that type of an impact, but it might just be more haphazard. It might be really like some places might not be impacted at all and other places might be really impacted in ways that you don't see with a recession.
