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Where Will Government Point Its 2024 IT Dollars?

The public-sector-facing technology industry convened this week for the Center for Digital Government’s annual Beyond the Beltway event. Highlights included a forecast of how state and local government will invest this year.

e.Republic President Dustin Haisler standing at a podium onstage speaking.
e.Republic President Dustin Haisler
Government Technology/David Kidd
Washington, D.C. — A lot can change in a year. At the 2023 Beyond the Beltway event, state and local government budgets were still flush with cash from federal stimulus packages. And that spending was fueling large-scale modernization efforts, nearly across the board. But while many of those projects are still in the implementation phase, a return to pre-pandemic spending is near as federal support to states and localities largely runs out by the end of 2024.

But there are many positive indicators for overall economic health, and that includes for state and local IT. e.Republic* President Dustin Haisler presented this year’s spending forecast when it comes to technology, pointing to “market tailwinds” including rising property values that put money into local budgets, low inflation and unemployment, and an expected recession that did not materialize.

In all, state and local government and education is projected to spend $143.6 billion this year — up 4.5 percent from $137.4 billion in 2023.

Haisler went on to offer projected spending figures in seven different market segments.

In each of these areas, Haisler expects increases over 2023 spending.

Driving all of this market activity are the biggest priorities of IT leaders in government. Across states, cities and counties, cybersecurity, customer experience and workforce all rank in the top three for CIOs.

“Technology is embedded into everything SLED [state, local and education] does,” Haisler said. “This [IT] is a fundamental aspect of the new way of doing business in the public sector.”

Filling open positions and retaining current staff has long been a significant challenge in government, where salaries trend lower than in the private sector and education and experience requirements can be disqualifying for many. Even with large-scale efforts to ease barriers to entry into the government workforce, a competitive labor market overall makes it hard for government to hire. And there are an abundance of open positions: The U.S. Bureau of Labor Statistics reports that in January 2024, state and local employment surpassed its pre-pandemic peak from February 2020.

To ease the strain this puts on the existing government workforce, many have turned to managed services, outsourcing entire functions to private-sector partners to meet resident needs.

And as they engage with the technology firms whose tools are vital to effective government, technology officials offered a few clear pieces of advice: Prospective contractors should read and understand the organization’s goals and plans, which are likely readily available online. When offering a solution for consideration, it should reflect an understanding of government’s constraints and core mission of service.

“I’m not looking for vendors, I’m looking for partners,” said North Dakota CISO Michael Gregg, putting a fine point on sentiments offered by many of his peers. “I’m not interested in a transactional relationship.”

*e.Republic is the parent company of Government Technology, the Center for Digital Government and Industry Navigator.
Noelle Knell is the executive editor for e.Republic, responsible for setting the overall direction for e.Republic’s editorial platforms, including Government Technology, Governing, Industry Insider, Emergency Management and the Center for Digital Education. She has been with e.Republic since 2011, and has decades of writing, editing and leadership experience. A California native, Noelle has worked in both state and local government, and is a graduate of the University of California, Davis, with majors in political science and American history.