An increase in government spending does not necessarily mean an increase in IT spending.
Earlier this year, e.Republic’s Center for Digital Government reported that revenue collected by state and local governments will increase by an average of more than 6 percent in fiscal 2014, marking the fourth consecutive year of revenue growth.
That’s good news for public CIOs, right? Well, maybe so and maybe not.
Yes, government spending is projected to increase in 40 states and the District of Columbia during fiscal 2014. But that doesn’t mean IT automatically gets a raise — a fact that was reflected in CIO comments during our Beyond the Beltway conference in March. The annual state and local government market briefing offered a mixed outlook for the upcoming year.
Ohio CIO Stu Davis described technology spending in his state as “a little better than it has been,” and Texas CIO Karen Robinson said IT budgets in her state are holding up nicely. Others aren’t so lucky, however. Pennsylvania CIO Tony Encinias said rising pension and benefit costs are crowding out funding for his department. “The state budget is getting better, but that doesn’t help me,” he said. “I actually don’t have as much money as before.”
On the local side, Baltimore CIO Chris Tonjes said the recession isn’t over in his city. “Our revenues haven’t recovered to the degree they have in other cities,” he said. In addition, heavy winter snow and other unexpected events have drained city coffers. “That makes it difficult for us to ask for more IT money.”
And Mississippi CIO Craig Orgeron noted that rebounding revenues may be dulling legislative appetite for technology transformation. “You can advocate for change when revenue is going down,” he said. “But the will to change is different when revenues are going up.”
As a result, Orgeron said the state is pumping more money into education, corrections and health care — but not necessarily technology. “Our challenge is to formalize investment in technology infrastructure,” he said. “How do we make that a thing that gets talked about regularly?”
It’s a question facing most technology leaders. That’s why public CIOs like Nevada’s David Gustafson and Nebraska’s Brenda Decker work to forge relationships and trust with lawmakers and budget officers in their states. They’ve also established expert review boards to bolster their credibility with key decision-makers. Similarly, a cross-agency panel evaluates major IT projects in Kentucky, and the state is refining its process for building business cases for new technology. (You can read more on page 8.)
All of this points to the continuing importance of strategic relationships and creative thinking for public CIOs even as — or maybe especially as — the state and local revenue picture brightens.